Quiz Ch 22 – Bank Interest Rate Difference
Essentials of Investments
Bodie, Kane, and Marcus
12th Edition
What term describes the contrast between the interest rate for borrowers and the interest rate on liabilities in banking?
What term describes the contrast between the interest rate for borrowers and the interest rate on liabilities in banking?
Which characteristic is best illustrated by Leo’s behavior of stating that Luisa’s house is worth only $280,000 but planning to put his own identical house on the market for $295,000 after Luisa sells her house for $320,000?
What characteristic is best illustrated by a neighbor, who had always been conservative with money, suddenly investing all their lottery winnings in a high-risk business venture they had previously refused to invest in, despite knowing it had a low chance of success?
What is the characteristic best illustrated by Thanh’s decision to sell a stock only if he can receive $25 per share or better after it had increased to $29 per share but declined to $20 per share?
What characteristic is best illustrated by Hyun-Ji’s retirement planning, where she computes her retirement needs as $45,000 per year for ten years, based on her expectation of living only ten years after she retires, despite the possibility of living longer?
What behavioral bias is illustrated by Siobhan’s tendency to hold onto assets that have lost value in the hope of future value increase?
What behavioral characteristic is displayed by Ramon, who hesitates to expand his successful laundry and dry cleaning business by opening a second location due to fear of failure?
What behavioral characteristic is demonstrated by someone who refuses to invest in a start-up company because they don’t know the odds of its success while their friends are investing in it?
What do some people believe about the actions of traders who continuously buy and sell in an efficient market, and which do those who do not believe in this effect most likely subscribe to?
Given your sister’s familiarity with the airline industry, which stock should she consider based on the provided information?