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This quiz consists of 5 multiple choice and 5 short answer questions through For Chapters 8-10.

Multiple Choice Questions

1. According to the author, financial markets boil down to four basic simple needs. What is the second discussed in Chapter 7?
(a) Insuring against risk.
(b) Storing, protecting and making profitable use of excess capital.
(c) Raising capital.
(d) Speculation.

2. What is a financial term denoting a collection of investments held by an investment company, hedge fund, financial institution or individual?
(a) Collateral.
(b) Legislation.
(c) Security.
(d) Portfolio.

3. According to the principles of a market economy, if it's raining, it's time to sell what?
(a) Houses.
(b) Boats.
(c) Loans.
(d) Umbrellas.

4. When did the Great Depression begin in the United States?
(a) 1929.
(b) 1918.
(c) 1886.
(d) 1905.

5. What are negative results which occur while trying to achieve a goal for the common good?
(a) Unknown incentives.
(b) Perverse incentives.
(c) Abstract incentives.
(d) Ghost incentives.

Short Answer Questions

1. What does OPEC stand for?

2. According to the author in Chapter 2, a horn from a black rhinoceros can fetch what amount on the black market?

3. What is the capital of the Republic of Cuba?

4. When was Douglas Ivester born?

5. What contends that prices of publicly traded assets reflect all publicly available information?

(see the answer key)

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