Whether or Not a Good Can Be Classified as a Complement

question 117

Multiple Choice

Whether or not a good can be classified as a complement depends on whether;

• A)you personally tend to consume the goods together.
• B)no substitutes exist.
• C)an increase in demand for one good follows a decrease in the price of the other.
• D)an increase in demand for one good follows an increase in the price of the other.

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Definitions:

Convertible Bonds

Bonds that can be converted into a predetermined amount of the issuing company's equity at certain times during its life, usually at the discretion of the bondholder.

Call Option

A financial contract giving the buyer the right, but not the obligation, to buy an asset at a specified price within a predetermined period.

Conversion Ratio

The number of shares a bondholder can receive upon converting their bonds into equity shares.