A Basic Knowledge of Finance Will Help You with Your

question 14

Multiple Choice

A basic knowledge of finance will help you with your personal investments by helping you understand

• A) how to accurately predict changes in the short term interest rates.
• B) how to determine the optimal dividend policy for each firm.
• C) how to determine which technology is most likely to be accepted by consumers.
• D) how to review companies and industries to determine their prospects for future growth and the risk inherent in those companies and industries.
• E) how to predict the growth in sales for the firm.

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Definitions:

Consumer Surplus

The offset between what customers are willing and able to pay for a service or product and what they actually expend.

Consumer Surplus

The distinction between the ideal spending amount of consumers on a good or service and their actual expenditure.

Government

The organization that is the governing authority of a political unit, responsible for creating and enforcing laws and managing public services.

Transfer

The movement of something from one place, person, or ownership to another, often without the exchange of money.