1. A direct finance can be described as?A. buy shares in a mutual fund.B. borrow $2500 from a friend.C. take out a mortgage from your local bank.D. buy shares of common stock in the secondary market.2. Values measured using current prices are calledvalues.A. nominalB. realC. inflatedD. aggregate3.can be described as the case of the Company Anotalia uses the funds raised from sellingbonds to pay for the Royal Caribbean cruises for all of its employees and their families.A. Adverse selectionB. Moral hazardC. Risk sharingD. Credit risk4. The money market instruments that were created to assist in carrying out international trade arecalledA. negotiable CDs.B. banker's acceptances.C. repurchase agreements.D. federal funds.5. Understanding the business cycle is important for business managers becauseA. they affect the demand for their productsB. they affect their profitsC. to frame appropriate policies and forward planningD. all the above 6. During economic expansion, the unemployment rate and outputA. rises ; fallsB. rises ; risesC. falls ; risesD. falls ; falls7. TheA. world war I, 1914 - 33ofcaused enormous misery and human sufferingsB. financial crisis, 1919 - 23C. great depression, 1929 - 33D. world war II, 1939 - 638. Sapsiree Taerattanachai buying a badminton ticket game with his online banking is an example of thefunction of money.A. medium of exchangeB. unit of accountC. store of valueD. standard of deferred payment9. A common stock is a claim on a corporation'sA. debt.B. liabilities.C. bonds.D. profits.10. Currency includesA. Paper money, coins, checks and savings depositsB. Paper money, coins, checks and e-moneyC. Paper money and checkD. Paper money and coins

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$2500 om a e out a mortgage from your local bank. shares of common stock in the secondary market. ues measured using current prices are called ninal values. ated regate can be described as the case of the Company Anotalia uses the funds to pay for the Royal Caribbean cruises for all of its employees and their famil rerse selection ral hazard = sharing dit risk emoney market instruments that were created to assist in carrying out inte otiable CDs. ker's acceptances. urchase agreements. eral funds. derstanding the business cycle is important for business managers because

$2500 om a e out a mortgage from your local bank. shares of common stock in the secondary market. ues measured using current prices are called ninal values. ated regate can be described as the case of the Company Anotalia uses the funds to pay for the Royal Caribbean cruises for all of its employees and their famil rerse selection ral hazard = sharing dit risk emoney market instruments that were created to assist in carrying out inte otiable CDs. ker's acceptances. urchase agreements. eral funds. derstanding the business cycle is important for business managers because

Principles of Economics 2e

2nd Edition

ISBN:9781947172364

Author:Steven A. Greenlaw; David Shapiro

Publisher:Steven A. Greenlaw; David Shapiro

Chapter17: Financial Markets

Section: Chapter Questions

Problem 38P: Suppose Ford Motor Company issues a five year bond with a face value of 5,000 that pays an annual...

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Suppose Ford Motor Company issues a five year bond with a face value of 5,000 that pays an annual coupon payment of $150. What is the interest rate Ford is paying on the borrowed funds? Suppose the market interest rate rises from 3 to 4 a year after Ford issues the bonds. Will the value of the bond increase or decrease?
Some friends of yours have just had a child. Thinking ahead, and realizing the power of compound interest, they are considering investing for their child's college education, which will begin in 18 years. Assume that the cost of a college education today is $125,000. Also assume there is no inflation and no tax on interest income used to pay college tuition and expenses. Instructions: Enter your responses rounded to the nearest dollar. Do not round intermediate calculations. a. If the interest rate is 5 percent, how much money will your friends need to put into their savings account today to have $125,000 in 18 years? They would need to put $ 36982.9 into their savings account today. b. What if the interest rate were 7 percent? They would need to put $ into their savings account today. c. The chance that the price of a college education will be the same 18 years from now as it is today seems remote. Assuming that the price will rise 3 percent per year, and that today's interest rate is…
One of the benefits financial capital markets offer savers is the opportunity to earn income. a. Savers earn income in the form of purchasing b. Savers earn income in the form of through partial ownership of a corporations that they acquire by by lending money to corporations when they purchase
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