Exam
Name_
MULTIPLE CHOICE. Choose the one alternative that best completes the statement or answers the question.
1) When a person consumes two goods (A and B), that person's utility is maximized when the
1) _
budget is allocated such that:
A) the margina
Exam
Name_
MULTIPLE CHOICE. Choose the one alternative that best completes the statement or answers
the question.
1)
The marginal rate of technical substitution is equal to:
1)
_
A)
the absolute value of the slope of an isoquant.
B)
the ratio of the margi
Exam
Name_
MULTIPLE CHOICE. Choose the one alternative that best completes the statement or answers
the question.
1)
In a recent article, two economists estimated that the 37.5% increase in price that would result from a 75
cent tax increase on cigarettes
Exam
Name_
MULTIPLE CHOICE. Choose the one alternative that best completes the statement or answers
the question.
1)
In 1985, Alice paid $20,000 for an option to purchase ten acres of land. By paying the $20,000, she
bought the right to buy the land for $
Exam
Name_
MULTIPLE CHOICE. Choose the one alternative that best completes the statement or answers
the question.
1)
When a person consumes two goods (A and B), that person's utility is maximized when the budget is
allocated such that:
1)
_
A)
the margina
Hong Kong Shue Yan University
Econ203 Intermediate Microeconomics
Quiz 1
Submit them in groups.
1. Draw indifference curves that represent the following individuals preferences for
hamburgers and soft drinks. Indicate the direction in which the individual
CHAPTER 5
Introduction to Risk, Return, and
the Historical Record
5-1
5.1 Determinants of the Level of
Interest Rates
Supply
Households
Demand
Businesses
Governments Net Supply and/or Demand
Federal Reserve Actions
5-2
Real and Nominal Rates of Inte
CHAPTER 7
Optimal Risky Portfolios
7-1
The Investment Decision
The investment decision can be viewed as
a top-down process with 3 steps:
1. Capital allocation (optimal capital
allocation between risky vs. risk-free)
2. Asset allocation across broad asse
CHAPTER 6
Risk Aversion and Capital
Allocation to Risky Assets
6-1
6.1 Risk and Risk Aversion
Speculation
Assumption of considerable investment risk to
obtain commensurate gain
Considerable risk
Sufficient to affect the decision
Commensurate gain
A
CHAPTER 9
The Capital Asset Pricing Model
9-1
9.1 The Capital Asset Pricing Model
The CAPM is a set of predictions concerning
equilibrium expected returns on risky assets.
The model gives us a precise prediction of the
relationship that we should observ
Chapter 05 - Learning about Return and Risk from the Historical Record
Chapter 05
Learning about Return and Risk from the Historical Record
Multiple Choice Questions
1. Over the past year you earned a nominal rate of interest of 10 percent on your money.
Chapter 05 - Introduction to Risk, Return, and the Historical Record
Chapter 05
Introduction to Risk, Return, and the Historical Record
Multiple Choice Questions
1. Over the past year you earned a nominal rate of interest of 10 percent on your money. The
Exercises on Risk and Return
1.
a.
b.
c.
d.
The expected return on an investment in stock is
the expected dividend payments
the anticipated capital gains
the sum of expected dividends and capital gains
less than the realized return
ANS:
C
2. The holding p
Multiple Choice Questions
1. Which of the following statements regarding risk-averse investors is true?
A) They only care about the rate of return.
B) They accept investments that are fair games.
C) They only accept risky investments that offer risk premi