In the Small Town of Hamilton, Tasmania, There Is a Local

question 81

Multiple Choice

In the small town of Hamilton, Tasmania, there is a local hardware store called Eddy's Hardware. Only two types of workers apply for jobs at Eddy's Hardware, cowboys and farmboys. Local politicians have received numerous complaints that Eddy's Hardware is practicing wage discrimination against cowboys. Eddy's Hardware denies the complaint and says they are only trying to maximise profit. There is also a second hardware store in town, named Frank's Hardware, which, unlike Eddy's Hardware, is not facing discriminatory complaints.
-Which of the following statements would strengthen the discrimination complaint against Eddy's Hardware? (i) many cowboys take six months per year off from work to compete in a rodeo circuit, and therefore have less on-the-job experience with a hardware store
(ii) farmboys are more prone to calling in sick
(iii) farmboys often show up to work still intoxicated from the night before

• A) (i) and (ii)
• B) (ii) and (iii)
• C) (i) and (iii)
• D) (i) only

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Definitions:

Price Volatility

The degree to which the price of an asset, security, or market index moves up or down over time.

Coupon Bond

A bond that pays the holder a fixed interest payment (coupon) at regular intervals until maturity, when the principal amount is repaid.

Maturity

The date on which the principal amount of a financial instrument, such as a bond or loan, becomes due and is to be paid.

Price Sensitive

Pertaining to stocks or securities that are highly responsive to changes or news in the market, affecting their price movements.