A Contingent Claim Is Best Described As

question 55

Multiple Choice

A contingent claim is best described as:

• A)a contract readily traded on an exchange.
• B)an asset whose value depends on the value of some other asset.
• C)an asset readily traded on an exchange.
• D)a liability.

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Definitions:

Allocative Efficiency

A state of resource allocation where it is impossible to make any one individual better off without making someone else worse off, often achieved when marginal cost equals marginal benefit.

Government Budget

A financial statement presenting the government's projected revenue and spending for a specific fiscal period, outlining planned financial operations and priorities.

Allocative Efficiency

A state of the economy where resources are allocated in a way that maximizes the utility or satisfaction of consumers.

Consumer Surplus

The discrepancy between the aggregate sum consumers are prepared and can afford to spend on a product or service and the actual total amount they end up paying.