Suppose That You Own a Rowboat and Sometimes Go Rowing

question 52

Multiple Choice

Suppose that you own a rowboat and sometimes go rowing in the summer. In June, you are planning to go rowing with two of your friends (three people total in the boat) , and in July, you are planning to go rowing with just one friend (two people total in the boat) . Will you put in more effort (row harder) on the three-person trip or on the two-person trip?

• A) You will put in more effort on the three-person trip.
• B) You will put in more effort on the two-person trip.
• C) You will put in the same amount of effort on both trips.
• D) It is impossible to say-no research has examined this question.

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Definitions:

Treasury Bills

Short-term government securities with maturities of one year or less, sold at a discount to their face value.

Market Efficiency

A concept in financial economics that describes how well market prices reflect all available information, leading to assets being properly priced and markets allocating resources efficiently.

Financial Decision Maker

An individual or group responsible for making investment, financing, and dividend decisions within an organization.

Expected NPV

Projected Net Present Value; an estimation of a project's current value based on expected future cash flows discounted at the project's cost of capital.