Pirates Have Been Intensely Attacking Ships Off the Shore of Somalia

question 73

Multiple Choice

Pirates have been intensely attacking ships off the shore of Somalia this year. Boat owners have reportedly coughed up more than $30 million in ransom and insurance premiums have shot up. The pirate activity and increase in premiums means that the expected wealth of boat owners who sail near Somalia is

• A) decreasing.
• B) increasing.
• C) staying the same.
• D) decreasing only if they have insurance.

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Definitions:

After-tax Value

The net value of an investment after all taxes have been subtracted.

Retirement Plan

A financial strategy designed to provide individuals with income upon retirement, often involving savings, investments, and other benefits.

Tax Level

The rate at which income, corporate profits, or other assets are taxed by the government.

Zero-coupon Bonds

Fixed-income securities issued at a discount and repaid at face value but do not offer interest payments through their life.