Question

A securities dealer will offer to sell a stock at the _____________ price.

            A) bid

            B) ask

            C) market

            D) new

The primary tool of The Fed is:

            A) reserve requirements
B) interest rates
C) open market operations
D) taxing and spending

) An investor who would accept additional risk only in exchange for receiving a lower return would be referred to as a:

            A) risk averse investor
B) risk neutral investor
C) risk seeking investor
D) none of the above

Answer 1

Hi,

For the first question

Ask price is the price at which dealer/broker will sell the shares

hence for the first quesiton answer is B

For the second question

Fed is the national Central bank of USA

It has 3 tools:

Open Market Operations

Discount Rate

Reserve Requirement

Out of which Open Market Operations is its Priamry tool which involve the buying and sellinf of govt securities

Hence for question 2, correct ans is C

For Que 3

A risk averse investor does not want additional risk

A risk neutral investor sees everything on mathematics

A risk seeking investor will take additional risk but only in exchange of additional return,.

Hence the correct answer should be D none of the above

Because though the risk seeking investor take additional risk but he/she also need extra returns

Thanks