#1: Assuming that everything else is equal select the bond that most likely pays
ID: 1243843 • Letter: #
Question
#1: Assuming that everything else is equal select the bond that most likely pays a lower interest rate.
A. A bond issues by a government that is engaged in a civil war.
B. A bond issued by the government of Japan
#2: Which of the following statements about stocks are correct? CHECK ALL THAT APPLY.
A. A corporation can increase the price of its stock by issuing additional shares of stock.
B. The Standard & Poor's 500 is an example of a stock index.
C. An increase in the perceived profitability of a corporation will cause the price of its stock to rise.
Explanation / Answer
Sorry previously I read it as higher interest rate !! :(
SORRY
1)
Despite frequent, dire warnings about the unsustainability of government budget deficits in the United States, Europe and Japan, investors are lining up to lend to some governments at very low interest rates. Interest rates on 10-year U.S. treasury notes are about 2%, close to record lows. The same is true in Germany and interest rates on Japan's 10-year government bonds are below 1%.
B
2)
It's one possible scenario. For example, if a stock reaches a very high value, the company may decide to split the stock, meaning that for every 1 share of stock, there are now 2 that are worth half the value of the original 1. This is done to make more shares available, so more people can invest in the company. It's also indicative of a company doing very well. So, the price goes up as people clamor to buy shares in the stock.
B
A ,C - not always true !!
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