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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. 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) Futures contract.
(c) Asset allocation.
(d) Money market.

2. With uniform rules and regulations, the cost of doing business in the private sector is what, according to the author in Chapter 3?
(a) Maintained.
(b) Lowered.
(c) Prohibitive.
(d) Raised.

3. Michael Jensen refers to company stock options as what in Chapter 2?
(a) "Managerial heroin."
(b) "Cocaine for businessmen."
(c) "A trough of money."
(d) "Wall Streets marijuana."

4. Human capital is extremely important in economics because it is also tied together with what?
(a) Productivity.
(b) Inflation.
(c) Collateral.
(d) Security.

5. A market economy delegates resources to an area where they are what, according to the author in Chapter 1?
(a) Most productive.
(b) Least wealthy.
(c) Most wealthy.
(d) Least productive.

Short Answer Questions

1. In finance, what is a derivative financial instrument that specifies a contract between two parties for a future transaction on an asset at a reference price?

2. Who introduced the Hope credit?

3. In finance, what is a debt security in which the authorized issuer owes the holders a debt and, depending on the terms, is obliged to pay interest to use and/or to repay the principal at a later date?

4. In 1900, the average wage was how much per hour according to the author in Chapter 9?

5. What is the appropriation of government spending for localized projects secured solely or primarily to bring money to a representative's district?

(see the answer key)

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