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on 25-Jun-2016 (Sat)

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Flashcard 1343476600076

Tags
#2015 #book-2 #cfa #cfa-level-1 #economics #schweser
Question
How is Veblen good similar to Giffen good?
Answer
A Veblen good is also one for which an increase (decrease) in price results in an increase (decrease) in the quantity consumed. However, a Veblen good is not an inferior good . The increase in consumption when the price of the good increases is due to a perception that a higher price makes consuming the good more desirable in some way, perhaps conveying higher status.

It seems that when Giffen good gets cheaper, it triggers negative income effect (more remaining money) - this is how we get from goods price to income, therefore we can say it is inferior, i.e. income elasticity of demand is negative.

statusnot learnedmeasured difficulty37% [default]last interval [days]               
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Flashcard 1346789838092

Tags
#bond-futures #bonds #finance
Question
Positive carry:Forward price of bond<[...]
Financing costs<Income earned
Answer
Cash price of bond

statusnot learnedmeasured difficulty37% [default]last interval [days]               
repetition number in this series0memorised on               scheduled repetition               
scheduled repetition interval               last repetition or drill

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Positive carry: Forward price of bond < Cash price of bond Financing costs < Income earned







Flashcard 1346802683148

Tags
#bond-futures #bonds #finance
Question
The net cost of carry is the cost of [...], less the accrued income on the bond earned during the carry period.
Answer
funding (financing) the position

statusnot learnedmeasured difficulty37% [default]last interval [days]               
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The net cost of carry is the cost of funding the position, less the accrued income on the bond earned during the carry period.