Mercer Capital's RIA Holiday Quiz

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* 1. Several central banks imposed negative interest rates in 2020.  When was the first time negative interest rates were officially used to stimulate a country’s economy?

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* 2. How many rolls of toilet paper does the average person use per year?

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* 3. Which Black Monday has the largest single-day drop in the Dow Jones?

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* 4. While holiday gift giving can be a major revenue driver for many businesses, it can also be a source of economic inefficiency.  When a recipient receives a gift they would have not otherwise bought, the implication is that the recipient values the gift at less than its cost—an inefficiency economists refer to as deadweight loss.  Based on economist Joel Waldfogel’s seminal paper The Deadweight Loss of Christmas, what is the estimated range of deadweight loss as a percentage of the gift price?1

1Author’s note: “Deadweight loss” is not generally viewed as an acceptable explanation for why you didn’t give a gift.

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* 5. Gift cards have the potential to mitigate deadweight loss by allowing the gift recipient to make the purchasing decision (albeit from a restricted set of options).  Yet gift cards introduce another economic inefficiency: a certain percentage of gift card dollars are never spent (referred to as “breakage” in industries where gift card sales are common).  Based on SEC filings, what is the estimated range of breakage rates (breakage revenue as a percentage of gift card sales) for public companies?

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* 6. When was the modern toilet paper roll patented?

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* 7. Excluding the newly-added Tesla, which S&P 500 constituent has seen the highest year-to-date price return (pricing data through December 11, 2020)?

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* 8. Dow 30,000 seemed a long way off back in March, but nevertheless, the index reached that milestone for the first time in November this year.  In what year did the Dow first cross 20,000?

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* 9. The panic buying of toilet paper earlier this year was driven by similar psychology as bank runs in prior centuries.  In both cases, the behavior was rational at the individual level (seeing what was happening, individuals rationally secured toilet paper / withdrew their deposits before it was too late) but resulted in sub-optimal outcomes at the macro level (empty shelves this year and insolvent financial institutions in prior centuries).  Banking runs have been avoided in the United States since the FDIC was established in which year?

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* 10. Which state has the lowest rate of COVID-19 cases per 100,000 people?

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