If the Bidders at a First-Price Auction Have True Values

question 31

Multiple Choice

If the bidders at a first-price auction have true values of $78,$72,$66,and $65,the item will sell for

• A)$78
• B)just under $78
• C)$72
• D)just over $72

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Definitions:

Simple Interest

Interest calculated solely on the principal amount of a loan or deposit, without compounding.

Consecutive GICs

A sequence of Guaranteed Investment Certificates held one after another, often to create a ladder strategy for managing interest rate risk.

Interest Rates

The amount charged, expressed as a percentage of principal, by a lender to a borrower for the use of assets.

Term Deposit

A bank deposit that has a fixed term or period of time until you can access your money, often with a higher interest rate than savings accounts.