1.2. Two major-party presidential candidates are running against each other in the 2016 election.

The Democratic Party candidate promises more money for corn-based ethanol research, and the Republican Party candidate promises more money for defense contractors. In the weeks before the election, defense stocks take a nosedive.

a. Who is probably going to win the election:

the pro-ethanol candidate or the pro-defense spending candidate?

b. We talked about how price signals are sometimes noisy. Think of two or three other markets you might want to look at to see if your answer to part a is correct.