To Provide Quantitative Answers to Policy Questions

question 4

Multiple Choice

To provide quantitative answers to policy questions

• A)it is typically sufficient to use common sense.
• B)you should interview the policy makers involved.
• C)you should examine empirical evidence.
• D)is typically impossible since policy questions are not quantifiable.

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Definitions:

Front-end Commission

A fee paid when purchasing shares of a mutual fund, upfront, which reduces the amount invested from the start.

Expense Ratio

The annual fee that all funds and exchange-traded funds charge their shareholders, expressed as a percentage of the fund's total assets.

Rate of Return

The gain or loss on an investment over a specified time period, expressed as a percentage of the investment's cost.

Exercise Price

The exercise price is the price at which the holder of an option can buy (in the case of a call option) or sell (in the case of a put option) the underlying asset.