Suppose That When the Price of Hamburgers Decreases,the Ruiz Family

question 199

Multiple Choice

Suppose that when the price of hamburgers decreases,the Ruiz family increases their purchases of ketchup.To the Ruiz family,

• A) hamburgers and ketchup are complements.
• B) hamburgers and ketchup are substitutes.
• C) hamburgers and ketchup are normal goods.
• D) hamburgers are normal goods and hot dogs are inferior goods.

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Definitions:

Conversion Price

The predetermined price at which convertible security can be exchanged for a specified number of another security, typically shares of common stock.

Convertible Bonds

Convertible bonds are a type of bond that can be converted into a predetermined number of the company's equity shares at certain times during the bond's life, usually at the discretion of the bondholder.

Conversion Premium

The extra amount over the current value of the underlying asset that convertible security holders pay when converting into common stock.

Convertible Bond

A type of bond that can be converted into a predetermined number of shares of the issuing company's stock, at certain times during its life, usually at the discretion of the bondholder.