If the Cost of Housing Increases by 10 Percent,then,other Things

question 20

Multiple Choice

If the cost of housing increases by 10 percent,then,other things the same,the CPI is likely to increase by about

• A)1.7 percent.
• B)3.3 percent.
• C)4.2 percent.
• D)10 percent.

---

Definitions:

Intrinsic Value

The perceived or calculated true value of an asset, investment, or company based on fundamental analysis rather than current market price.

Equilibrium

A state in which market supply and demand balance each other, resulting in stable prices and no tendency for change.

Call

An options contract that gives the investor the right, but not the obligation, to buy a stock, bond, commodity, or other instrument at a specified price within a specific time period.

Put

A financial derivative option that gives the holder the right, but not the obligation, to sell a security at a specified price within a specified time.