You Bought Stock in 2010 for $100 and You Sold

question 71

Multiple Choice

You bought stock in 2010 for $100 and you sold it in 2012 for $200.You used a broker to sell the stock for you,and he charged you $20.This transaction contributed ________ to gross domestic product (GDP) .

• A) $200
• B) $20
• C) $220
• D) $100
• E) $120

Recognize the impact of income and cost of living differences on financial decisions and utility.

Distinguish between different fair allocation criteria and how they apply to resource distribution.

Explain the process of Borda count in elections and its outcomes.

Analyze the implications of fairness and envy in allocation decisions.

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Definitions:

Deferred Consumption Risk

The risk associated with postponing consumption today in order to invest, with the potential of not having enough resources in the future.

Liquidity Risk

The risk that an entity will not be able to meet its short-term financial obligations due to the inability to quickly convert assets to cash without significant loss.

Maturity Risk

The risk that the value of a financial instrument will change due to a change in the absolute level of interest rates, sometimes referred to as interest rate risk.

Inflation

The rate at which the general level of prices for goods and services is rising, eroding purchasing power.