Studies Show That

question 215

Multiple Choice

Studies show that

• A) it is impossible to estimate the benefits of trade barriers.
• B) costs and benefits of trade barriers are about equal.
• C) benefits of trade barriers exceed their costs in developing nations.
• D) costs of trade barriers exceed their benefits, creating an efficiency loss for society.

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Definitions:

Asian Put Option

A type of put option where the payoff depends on the average price of the underlying asset over a certain period rather than its price at expiration.

Underlying Asset

An asset such as a stock, bond, commodity, or currency on which a derivative's price is based.

Exercise Price

The price at which the holder of an options contract may buy or sell the underlying security, also known as the strike price.

Quanto

A type of derivative in which the underlying is denominated in one currency, but the instrument itself is settled in another currency at a fixed rate.