Consider the Following Characteristics

question 94

Multiple Choice

Consider the following characteristics:
A.a market structure with barriers to entry
B.demand curves that are easily identified
C.firm cannot make zero profits in the long run
D.firm can reap long-run profits.
Which of the characteristics in the list above is shared by an oligopolist and a monopolist?

• A)a, b, c, and d
• B)a, b, and d
• C)a, c, and d
• D)a and d

Understand the fundamental definitions and functions of various derivative contracts including futures, options, and swaps.

Recognize the processes and outcomes of hedging strategies using derivative securities.

Identify the differences between forward contracts and options, and their respective valuation mechanisms.

Understand the role and operation of swap dealers within the derivatives market.

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Definitions:

Takings Clause

A clause in the Fifth Amendment of the U.S. Constitution requiring that when government uses its power to take private property for public use, it must pay the owner just compensation, or fair market value, for the property.

Condemnation

The legal process by which government or a legal entity takes private property for public use, with compensation to the owner.

Fifth Amendment

An amendment to the U.S. Constitution that provides several protections to individuals, including protection against self-incrimination and double jeopardy, and ensures due process of law.

State Common Law

Law that originates from decisions made by judges in state courts, rather than laws passed by state legislatures or Congress.