Nancy Lerner Is Taking a Course from Professor Goodheart Who

question 5

Multiple Choice

Nancy Lerner is taking a course from Professor Goodheart who will count only her best midterm grade and from Professor Stern who will count only her worst midterm grade.In one of her classes, Nancy has scores of 20 on her first midterm and 30 on her second midterm.When the first midterm score is measured on the horizontal axis and her second midterm score on the vertical, her indifference curve has a slope of zero at the point (20, 30) .This class could

• A)be Professor Goodheart's but could not be Professor Stern's.
• B)be Professor Stern's but could not be Professor Goodheart's.
• C)not be either Professor Goodheart's or Professor Stern's.
• D)be either Professor Goodheart's or Professor Stern's.
• E)There is not enough information to tell whose class it could or couldn't be.

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Definitions:

Debentures Issued

Long-term securities issued by a company to raise capital, backed only by the general creditworthiness and reputation of the issuer.

Preference Shares

A type of share that typically grants its holders priority over ordinary shareholders in receiving dividends and upon liquidation of the company's assets.

Financial Liability

Obligations a company owes to another entity, which could be in the form of loans, bonds payable, or other types of debt.

Compound Financial Instrument

A financial instrument that has both a debt and equity component and may be convertible into shares of the issuing company.