A Consumer Values a Car at $525,000 and a Producer

question 2

Multiple Choice

A consumer values a car at $525,000 and a producer values the same car at $485,000.If sales tax is 8% and is levied on the seller,then the sellers bottom line price is

• A)$527,000
• B)$523,800
• C)$525,000
• D)$500,000

---

Definitions:

Derivative Financial Instrument

is a financial contract whose value is based on the performance of underlying assets, indices, or interest rates, used for speculation, hedging, or risk management.

Option

A financial instrument that gives the holder the right to buy or sell a certain number of shares or debentures in a company by a specified date at a stipulated price.

Shares

Shares represent portions of equity in a company or financial asset, entitling holders to a proportional share of profits through dividends, when declared.