[Q]: Background: The trade-off theory of capital structure is the idea that a company chooses how much debt finance and how much equity finance to use by balancing the costs and benefits. The classical version of the hypothesis goes back to Kraus and Litzenberger[1] who considered a balance between the dead-weight costs of bankruptcy and the tax saving benefits of debt. Often agency costs are also included in the balance. This theory is often set up as a competitor theory to the pecking order theory of capital structure. A review of the literature is provided by Frank and Goyal.[2]  An important purpose of the theory is to explain the fact that corporations usually are financed partly with debt and partly with equity. It states that there is an advantage to financing with debt, the tax benefits of debt and there is a cost of financing with debt, the costs of financial distress including bankruptcy costs of debt and non-bankruptcy costs (e.g. staff leaving, suppliers demanding disadvantageous payment terms, bondholder/stockholder infighting, etc.). The marginal benefit of further increases in debt declines as debt increases, while the marginal cost increases, so that a firm that is optimizing its overall value will focus on this trade-off when choosing how much debt and equity to use for financing.  Paragraph: Bob is a financial analyst. He used to work for company A. Bob noticed that company A is mostly financed by debt. Recently, he changed job and now working as a financial analyst for another company, company B. Company B has completely different culture than company A. Company B is mostly financed by equity.  Given the paragraph above, please answer correctly the following question: Would company A consider or ignore backruptcy costs?
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[A]: consider


[Q]: Background: During Amniocentesis a small amount of amniotic fluid, which contains fetal cells, is extracted from the amnion or amniotic sac surrounding a developing fetus, and the fetal DNA is examined for genetic abnormalities. Amniocentesis is not performed for every pregnancy, but is generally done when an increased risk of genetic defects in the fetus is indicated, by mother's age (over 35 years is common), family history of genetic defects, or other factors.  Paragraph: David is a doctor with the city hospital. Today, he is seeing four patients, patient A, patient B, patient C, and patient D. All four patients are expectant mothers. Moreover, patient A is over thirty five years old, but patient B is under thirty five years old. Patient C has family history of genetic disorder, but patient D does not have any family history of genetic disorder. David needs to prescribe appropriate treatment according to each patient's condition.  Given the paragraph above, please answer correctly the following question: Would patient A be less or more at risk of genetic defects in the fetus than patient B?
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[A]: more


[Q]: Background: Declines in population size can result in a loss of genetic diversity, and owing to genetic variation's role in the evolutionary potential of a species, this could in turn result in an observable Allee effect. As a species' population becomes smaller, its gene pool will be reduced in size as well. One possible outcome from this genetic bottleneck is a reduction in fitness of the species through the process of genetic drift, as well as inbreeding depression. This overall fitness decrease of a species is caused by an accumulation of deleterious mutations throughout the population. Genetic variation within a species could range from beneficial to detrimental. Nevertheless, in a smaller sized gene pool, there is a higher chance of a stochastic event in which deleterious alleles become fixed (genetic drift). While evolutionary theory states that expressed deleterious alleles should be purged through natural selection, purging would be most efficient only at eliminating alleles that are highly detrimental or harmful. Mildly deleterious alleles such as those that act later in life would be less likely to be removed by natural selection, and conversely, newly acquired beneficial mutations are more likely to be lost by random chance in smaller genetic pools than larger ones.Although the long-term population persistence of several species with low genetic variation has recently prompted debate on the generality of inbreeding depression, there are various empirical evidences for genetic Allee effects. One such case was observed in the endangered Florida panther (Puma concolor coryi). The Florida panther experienced a genetic bottleneck in the early 1990s where the population was reduced to ≈25 adult individuals. This reduction in genetic diversity was correlated with defects that include lower sperm quality, abnormal testosterone levels, cowlicks, and kinked tails. In response, a genetic rescue plan was put in motion and several female pumas from Texas were introduced into the Florida population. This action quickly led...  Paragraph: Molly and Brian are two friends who moved away from one another after becoming close in college. They still talk on the phone regularly and see each other a couple times a year. During a recent conversation, the subject of population comes up. Molly's town is currently increasing a steady decrease in population, and Brian's town has been seeing an increase in population.  Given the paragraph above, please answer correctly the following question: Does Brian's town have a larger or smaller potential gene pool than Molly's?
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[A]: larger


[Q]: Background: Machines make work easier by increasing the amount of force that is applied, increasing the distance over which the force is applied, or changing the direction in which the force is applied. Contrary to popular belief, machines do not increase the amount of work that is done. They just change how the work is done. So if a machine increases the force applied, it must apply the force over a shorter distance. Similarly, if a machine increases the distance over which the force is applied, it must apply less force.  Paragraph: John wanted to invent a machine. To that end, he devised an experiment in which he used three components, comp A, comp B, and comp C. Comp A was a machine that applied force over a shorter distance. Comp B was also a machine, but it applied force over a longer distance. Comp C was not a machine.  Given the paragraph above, please answer correctly the following question: Would comp A increase or not increase the force applied compared to comp B?
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[A]:
increase