Suppose that the british stock market is integrated with the rest of the world and stansfield company has made its shares tradable internationally via cross-listing on the nyse. using the capm and a risk-free rate of 5%, estimate the equity cost of capital for stansfield. correlation coefficients stansfield england world sd (%) er (%) stansfield 1.00 0.90 0.60 20 ? england 1.00 0.80 18 14 world 1.00 15 12

Suppose that hubert, an economist from an am talk radio program, and kate, an economist from a nonprofit organization on the west coast, are arguing over government bailouts. the following dialogue shows an excerpt from their debate: kate: to recent financial crises, the concept of bailouts is a hot topic for debate among everyone these days. hubert: indeed, it’s gotten crazy! a government bailout of severely distressed financial firms is unnecessary because free markets will properly price assets. kate: i don’t know about that. without a bailout of severely distressed financial firms, the economy will experience a deep recession. the disagreement between these economists is most likely due todifferences in scientific judgments . despite their differences, with which proposition are two economists chosen at random most likely to agree? business managers can raise profit more easily by reducing costs than by raising revenue. central banks should focus more on maintaining low unemployment than on maintaining low inflation. employers should not be restricted from outsourcing work to foreign nations

What could cause a production possibilities curve to move down and to the left? a.) a nation loses land after being defeated in a war. b.) an increase in the use of computer technology speeds up production c.) a baby boom 20 years ago results in a large number of young adults in the population today. d.) thousands of investors from overseas invest money in a nations economy.

Usually, government officials make the decisions on the best ways to spend public money true or false