In the Problem Below, State Whether the Described Change Gives

question 57

Multiple Choice

In the problem below, state whether the described change gives a parallel line or a steeper line and write the new equation. The total monthly cost, in dollars, of a loan is C = 0.01x + 3, where x is the number of dollars borrowed and 3 is the current service fee. The service fee rises by 9 dollars.

• A) steeper; C = 9.01x + 3
• B) parallel; C = 0.01x + 9
• C) steeper; C = 0.01x + 12
• D) parallel; C = 9.01x + 3
• E) parallel; C = 0.01x + 12

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Definitions:

Speculator

An individual or entity that engages in the buying and selling of financial instruments or assets for short-term profit, taking on higher risk.

Futures Contract

A financial contract obligating the buyer to purchase, and the seller to sell, a particular asset at a predetermined future date and price.

Hedger

An individual or entity that enters into a financial contract to mitigate the risk of adverse price movements in an asset.

Swap Contract

A financial agreement where two parties exchange liabilities or cash flows from two different financial instruments for a set period.