All of the following are problems cited by Warren Buffet as problems with derivatives not traded on exchanges EXCEPT
A) they are thinly traded which makes it difficult to determine their value.
B) firms do not set aside reserves against potential losses.
C) they involve substantial counterparty risk.
D) they were not flexible enough due to lack of standardization.
Question 2
In real business cycle theory, the persistence of shocks to total factor productivity is justified by
A) the fact that some capital depreciates every period.
B) the behavior of Solow residuals.
C) the fact that Taylor rules have been used in post-war United States.
D) the fact that capital takes some time to build.
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