ECON 2301 Week 4 Quiz

Economists have developed models of risk aversion using the concept of

Consider the following two situations. Irene accepts a job where she will be driving in dangerous traffic, so she seeks auto insurance. After Victor buys health insurance, he visits the gym less frequently. Which of these person’s actions illustrates moral hazard?

The field of finance primarily studies

Economists disagree as to whether

According to the rule of 70, if the interest rate is 5 percent, how long will it take for the value of a savings account to double?

As the number of stocks in a portfolio rises,

An asset market is said to experience a speculative bubble when

Abby buys health insurance because she knows that she has health risks that wouldn’t be obvious to an insurance company. Brad buys home owners insurance and then is less careful to make sure he’s put out his cigarettes. The example with Abby

A person who believes strongly in the use of fundamental analysis to choose a portfolio of stocks

Question 10

A judge requires Harry to make a payment to Sally. The judge says that Harry can pay her either $10,000 today or $12,000 two years from today. Of the following interest rates, which is the highest one at which Harry would be better off paying the money today?