The Decrease in the Price of Gasoline to a National

question 49

Multiple Choice

The decrease in the price of gasoline to a national average of less than $3.20 during the summer of 2012 was most likely a result of

• A)an increase in demand due to reduced summer driving.
• B)an increase in supply resulting from higher refinery output.
• C)an increase in demand due to increase in summer driving along with a decrease in supply resulting from reduced refinery output.
• D)an increase in supply resulting from higher refinery output along with a decrease in demand in summer driving.

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Definitions:

Convertible Bonds

Bonds that can be converted into a predetermined number of a company’s shares, at the option of the bondholder, usually at certain times during their life.

Book Value Method

An accounting technique that determines the value of an asset as per the company’s balance sheet, subtracting liabilities from assets.

Market Value

The price at which an asset would trade in a competitive auction setting.

Par Value

A nominal or face value assigned to a share of stock in the company's charter, representing the minimum amount the stock can be sold for.