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This quiz consists of 5 multiple choice and 5 short answer questions through Chapters 4-7.

Multiple Choice Questions

1. What is an investment strategy that attempts to balance risk versus reward by adjusting the percentage of each asset in an investment portfolio according to the investors risk tolerance, goals and investment time frame?
(a) Adverse selection.
(b) Money market.
(c) Asset allocation.
(d) Futures contract.

2. OPEC is an intergovernmental organization of how many oil-producing countries?
(a) 8.
(b) 5.
(c) 12.
(d) 23.

3. When was the Hope credit established?
(a) 1999.
(b) 1974.
(c) 1985.
(d) 1992.

4. Economists ignored signs of problems in what year because they didn't want to face what might happen in the future, according to the author in the Introduction?
(a) 2005.
(b) 1994.
(c) 1998.
(d) 2002.

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

Short Answer Questions

1. What is a term used in economics that refers to a market process in which "bad" results occur when buyers and sellers have asymmetric information?

2. In economics and sociology, what refers to any factor that enables or motivates a particular course of action or counts as a reason for preferring one choice to the alternatives?

3. What refers to the degree to which a correct forecast of a system's state can be made either qualitatively or quantitatively?

4. What does OPEC stand for?

5. According to the principles of a market economy, if it's raining, it's time to sell what?

(see the answer key)

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