Question

Everything else held constant, if the Fed unexpectedly announces that it is worried about the economy potentially falling into a recession , you would expect stock prices to _____.

A. remain constant

B. Increase

C. Either increase, decrease, or remain constant

D. Decrease

2. Suppose you own a call option for one share of AT&T stock with a strike price of $50 and that you purchased it for $10. Assume that, on the expiration date, the price of AT&T stock is $30. You will ___ from this option.

A. gain $10

B. Lose $10

C. Gain $20

D. Lose $20

3.The standards for oil internationally is that a barrel of oil is always priced in terms of U.S. dollars, no matter where it is sold. Suppose that, after a recent OPEC meeting, the price of a barrel of oil rises. Everything else held constant, this would cause the currencies of oil exporting countries to ____ against the U.S. dollar.

a. either appreciate, depreciate, or remain constant

b. appreciate

c. depreciate

d. remain constant

4.Suppose the following is a recent quote from a chief currency strategist at a Japanese securities company when talking about the economies of Japan's South-East Asian neighbors. "With Stocks on an up trend for quite some time and the global economy seems to keep expanding, the general risk positive sentiment is continuing." Everything else held constant and assuming the quote represents conditions in Japan's neighbors but not in Japan itself, then the currencies of Japan's neighbors will ____ against the Japanese yen.

A. remain constant

B. Either depreciate, appreciate, or remain constant

C. depreciate

D. appreciate

Answer 1