VI Edition (2019/20)
The financial crisis appears when several segments of the financial market are temporarily unable to fulfil their functions. As a result, it is not possible for the economy to function smoothly. After reading about the financial crisis 2007-2009, Alicia Helman and her sister began to think about what situations to expect the crisis to appear on the market. Help her to decide which of the following situations may reveal the financial crisis:
A. Rapid increase in short-term interest rates on the money market
B. Rapid increase in foreign exchange prices
C. Reduction of foreign exchange market operations
D. Sudden fall in bond prices
Energy production in a power plant is highly inflexible because it cannot be stored. On the wholesale electricity market, it may happen that electricity prices are negative because demand is too low. This is not just a theoretical concept – sometimes buyers get both money and electricity. Which country was the earliest to introduce negative energy prices?
Mrs Alice’s yacht company produces export yachts. On 21 June, it signed an agreement with a foreign entity for the supply of 10 sea yachts with a total value of USD 2 million with a 3-month deferral. On the date of issue of the invoice, the USD/PLN exchange rate was 3.84. Being afraid of unfavourable changes in exchange rates, the company decided to hedge its revenues with a derivative. Which of the following options will allow the company to reduce the transaction risk?
A. American put option
B. European put opition
C. American call option
D. European call option
Which statement is true about growing in popularity Modern Monetary Theory?
A. Financing the government expenditures should not be considered as a tax objective
B. Saif’s law does not work in terms of fiat money
C. Budget surplus is harfmul for the economy and leads to a recession
D. Expansive fiscal policy may cause a decrease instead of an increase in the interest rate
According to the theory developed by Daniel Kahneman and Amos Tversky:
A. Person that is deciding to buy a train ticket instead of a plane ticket, after watching a documentary movie about aircraft crashes, probably undergoes availability heuristic.
B. The anchoring heuristic is about obstinate sticking to one’s own opinion, even after encountering opposite evidence.
C. If you flip a coin 3 times in a row and it’s head. That means that according to the mean reversion theory, probability of flipping a tail in a fourth throw is lower than 50%.
D. So-called “henpecked theory” says that men in a relationship have a tendency to partly adapt preferences of one’s partner in the process of making decisions.
Answer key (VI Edition)
- A, B, C, D
- A, B
- A, C, D