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

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Definitions:

Market Timing

An investment strategy where the investor tries to predict future market movements to buy low and sell high.

Asset Allocation Fund

A mutual fund that spreads its investments across various asset classes, aiming to reduce risk through diversification.

Sector Fund

A mutual fund that invests exclusively in a particular sector of the economy, such as technology, health care, or finance.

Money Market Funds

Mutual funds that invest in short-term debt securities such as government bonds, treasury bills, and commercial paper, offering investors liquidity and safety.