True/false?
1. Assuming that everything else is equal, a 3-month bond issued
by the government of Japan most likely pays a lower (?) interest
rate than a 3-month bond issued by a government that is engaged in
a civil war.
2. Assuming that everything else is equal, a corporate bond
issued by an electronics manufacturer most likely pays a higher (?)
interest rate than a municipal bond issued by a state.
3. Assuming that everything else is equal, a U.S. government
bond that matures 30 years from now most likely pays a higher (?)
interest rate than a U.S. government bond that matures 10 years
from now.
4. The Dow Jones Industrial Average is an example of a stock
exchange where one can purchase Starbucks stock.
5. An increase in the perceived profit-ability of Uber will
likely cause the value of its shares (=stock prices) to rise
6. The price of its shares will rise if Apple issues additional
shares of stock (*Issuing additional shares of stock dilutes the
power of votes/claim-for-dividend from the incumbent owners).
7. Expectations of a recession that reduces economywide
corporate profits will likely cause the value of corporates’ shares
to decline.
8. Consider a company JuiceStop which issues stocks to the
public for the first time in 2034. JuiceStop provides two shares.
During 2034, JuiceStop sells one of the two shares to Emily for
$20,000. Later in the same year, Emily sells the share to Janet for
$28,000. The second share, at a market value of $27,000, is sold to
Jerome. JuiceStop uses all the funds that are financed via selling
stocks to Emily and Jerome to purchase cutting-edge juicer
machines.
a. JuiceStop earns revenue when Janet purchases the share from
Emily: True? False?
True/false? 1. Assuming that everything else is equal, a 3-month bond issued by the government of Japan most likely pays
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