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Multiple Choice
1. A change in the level of an economic activity is desirable and should be undertaken as long as the marginal benefits
exceed the ____.
a. marginal returns
b. total costs
c. marginal costs
d. average costs
e. average benefits
ANSWER: c
POINTS: 1
DIFFICULTY: Easy
QUESTION TYPE: Multiple Choice
HAS VARIABLES: False
NATIONAL STANDARDS: United States - BPROG: Analytic
TOPICS: Marginal Analysis
KEYWORDS: BLOOM’S: Comprehension
DATE CREATED: 6/21/2016 8:42 AM
DATE MODIFIED: 6/21/2016 8:42 AM
2. The level of an economic activity should be increased to the point where the ____ is zero.
a. marginal cost
b. average cost
c. net marginal cost
d. net marginal benefit
e. none of the above
ANSWER: d
POINTS: 1
DIFFICULTY: Moderate
QUESTION TYPE: Multiple Choice
HAS VARIABLES: False
NATIONAL STANDARDS: United States - BPROG: Analytic
TOPICS: Marginal Analysis
KEYWORDS: BLOOM’S: Comprehension
DATE CREATED: 6/21/2016 8:42 AM
DATE MODIFIED: 6/21/2016 8:42 AM
4. Generally, investors expect that projects with high expected net present values also will be projects with
a. low risk
b. high risk
c. certain cash flows
d. short lives
e. none of the above
ANSWER: b
POINTS: 1
DIFFICULTY: Moderate
QUESTION TYPE: Multiple Choice
HAS VARIABLES: False
NATIONAL STANDARDS: United States - BPROG: Analytic
TOPICS: The Net Present Value Concept
KEYWORDS: BLOOM’S: Comprehension
DATE CREATED: 6/21/2016 8:42 AM
DATE MODIFIED: 6/21/2016 8:42 AM
6. The standard deviation is appropriate to compare the risk between two investments only if
a. the expected returns from the investments are approximately equal
b. the investments have similar life spans
7. The approximate probability of a value occurring that is greater than one standard deviation from the mean is
approximately (assuming a normal distribution)
a. 68.26%
b. 2.28%
c. 34%
d. 15.87%
e. none of the above
ANSWER: d
POINTS: 1
DIFFICULTY: Challenging
QUESTION TYPE: Multiple Choice
HAS VARIABLES: False
NATIONAL STANDARDS: United States - BPROG: Analytic
TOPICS: Meaning and Measurement of Risk
KEYWORDS: BLOOM’S: Comprehension
DATE CREATED: 6/21/2016 8:42 AM
DATE MODIFIED: 6/21/2016 8:42 AM
8. Based on risk-return tradeoffs observable in the financial marketplace, which of the following securities would you
expect to offer higher expected returns than corporate bonds?
a. U.S. Government bonds
b. municipal bonds
c. common stock
d. commercial paper
e. none of the above
ANSWER: c
POINTS: 1
DIFFICULTY: Easy
QUESTION TYPE: Multiple Choice
HAS VARIABLES: False
NATIONAL STANDARDS: United States - BPROG: Analytic
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