Exam 17: The Capital Market

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The figure given below shows the demand [D and D'] and supply [S and S'] curves of shares of stock.Figure 17.2 The figure given below shows the demand [D and D'] and supply [S and S'] curves of shares of stock.Figure 17.2    -Although technically owning a share means the shareholder holds a share of everything that the firm owns, but in actuality he is only entitled to a share of the company's earnings. -Although technically owning a share means the shareholder holds a share of everything that the firm owns, but in actuality he is only entitled to a share of the company's earnings.

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The figure given below shows the demand [D and D'] and supply [S and S'] curves of shares of stock.Figure 17.2 The figure given below shows the demand [D and D'] and supply [S and S'] curves of shares of stock.Figure 17.2    -Which of the following describes the relationship between bond prices and bond yields? -Which of the following describes the relationship between bond prices and bond yields?

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The figure given below shows the demand curves [D1 and D2] and the supply curve [S1] of capital.Figure 17.1 The figure given below shows the demand curves [D<sub>1</sub> and D<sub>2</sub>] and the supply curve [S<sub>1</sub>] of capital.Figure 17.1    -Dividend yield is: -Dividend yield is:

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The figure given below shows the demand [D and D'] and supply [S and S'] curves of shares of stock.Figure 17.2 The figure given below shows the demand [D and D'] and supply [S and S'] curves of shares of stock.Figure 17.2    -Buying a newly issued bond implies: -Buying a newly issued bond implies:

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The figure given below shows the demand [D and D'] and supply [S and S'] curves of shares of stock.Figure 17.2 The figure given below shows the demand [D and D'] and supply [S and S'] curves of shares of stock.Figure 17.2    -An investor who wants to diversify his portfolio will buy only bonds when both stocks and bonds are expected to yield better returns. -An investor who wants to diversify his portfolio will buy only bonds when both stocks and bonds are expected to yield better returns.

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The figure given below shows the demand [D and D'] and supply [S and S'] curves of shares of stock.Figure 17.2 The figure given below shows the demand [D and D'] and supply [S and S'] curves of shares of stock.Figure 17.2    -If bonds and stocks are considered to be substitute goods, and the investors expect stock prices to drop in the near future, _____. -If bonds and stocks are considered to be substitute goods, and the investors expect stock prices to drop in the near future, _____.

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The following figures show the demand (D) and supply (S) curves of micro and macro economists.Figure 16.6 The following figures show the demand (D) and supply (S) curves of micro and macro economists.Figure 16.6    -A firm decides to hire more equipment if: -A firm decides to hire more equipment if:

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The figure given below shows the demand [D and D'] and supply [S and S'] curves of shares of stock.Figure 17.2 The figure given below shows the demand [D and D'] and supply [S and S'] curves of shares of stock.Figure 17.2    -The housing bubble experienced in 2006 in the U.S. was exhibited by the extraordinary rise in the ratio of prices of houses to rents on houses. -The housing bubble experienced in 2006 in the U.S. was exhibited by the extraordinary rise in the ratio of prices of houses to rents on houses.

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The figure given below shows the demand curves [D1 and D2] and the supply curve [S1] of capital.Figure 17.1 The figure given below shows the demand curves [D<sub>1</sub> and D<sub>2</sub>] and the supply curve [S<sub>1</sub>] of capital.Figure 17.1    -The financial capital of a firm includes the: -The financial capital of a firm includes the:

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The figure given below shows the demand [D and D'] and supply [S and S'] curves of shares of stock.Figure 17.2 The figure given below shows the demand [D and D'] and supply [S and S'] curves of shares of stock.Figure 17.2    -The column 'Close' in the mutual fund table indicates the lowest asset value at which the fund was sold at the end of the last week. -The column 'Close' in the mutual fund table indicates the lowest asset value at which the fund was sold at the end of the last week.

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The figure given below shows the demand [D and D'] and supply [S and S'] curves of shares of stock.Figure 17.2 The figure given below shows the demand [D and D'] and supply [S and S'] curves of shares of stock.Figure 17.2    -The U.S. bond rating was devalued from AAA to AA+ in 2011 due to the rise in government debt. -The U.S. bond rating was devalued from AAA to AA+ in 2011 due to the rise in government debt.

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The figure given below shows the demand [D and D'] and supply [S and S'] curves of shares of stock.Figure 17.2 The figure given below shows the demand [D and D'] and supply [S and S'] curves of shares of stock.Figure 17.2    -A bubble or panic generally occurs in the stock market because of: -A bubble or panic generally occurs in the stock market because of:

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The following figures show the demand (D) and supply (S) curves of micro and macro economists.Figure 16.6 The following figures show the demand (D) and supply (S) curves of micro and macro economists.Figure 16.6    -​Which of the following will shift the demand curve for capital leftward? -​Which of the following will shift the demand curve for capital leftward?

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The figure given below shows the demand curves [D1 and D2] and the supply curve [S1] of capital.Figure 17.1 The figure given below shows the demand curves [D<sub>1</sub> and D<sub>2</sub>] and the supply curve [S<sub>1</sub>] of capital.Figure 17.1    -If the earnings report of a firm indicates higher earnings than was expected by the investors: -If the earnings report of a firm indicates higher earnings than was expected by the investors:

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The figure given below shows the demand [D and D'] and supply [S and S'] curves of shares of stock.Figure 17.2 The figure given below shows the demand [D and D'] and supply [S and S'] curves of shares of stock.Figure 17.2    -Yield on a bond refers to: -Yield on a bond refers to:

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The figure given below shows the demand curves [D1 and D2] and the supply curve [S1] of capital.Figure 17.1 The figure given below shows the demand curves [D<sub>1</sub> and D<sub>2</sub>] and the supply curve [S<sub>1</sub>] of capital.Figure 17.1    -The fees paid to a mutual fund manager is called: -The fees paid to a mutual fund manager is called:

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The figure given below shows the demand curves [D1 and D2] and the supply curve [S1] of capital.Figure 17.1 The figure given below shows the demand curves [D<sub>1</sub> and D<sub>2</sub>] and the supply curve [S<sub>1</sub>] of capital.Figure 17.1    -Compute the actual investment in a mutual fund carrying a front-end load of 10 percent on a sum of $10,000 invested by an individual. -Compute the actual investment in a mutual fund carrying a front-end load of 10 percent on a sum of $10,000 invested by an individual.

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The figure given below shows the demand curves [D1 and D2] and the supply curve [S1] of capital.Figure 17.1 The figure given below shows the demand curves [D<sub>1</sub> and D<sub>2</sub>] and the supply curve [S<sub>1</sub>] of capital.Figure 17.1    -If the P/E ratio is equal to 50, it implies that investors in the stock are willing to pay: -If the P/E ratio is equal to 50, it implies that investors in the stock are willing to pay:

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The figure given below shows the demand [D and D'] and supply [S and S'] curves of shares of stock.Figure 17.2 The figure given below shows the demand [D and D'] and supply [S and S'] curves of shares of stock.Figure 17.2    -Index mutual funds purchase shares of stock in those companies which are included in the market based indexes. -Index mutual funds purchase shares of stock in those companies which are included in the market based indexes.

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The figure given below shows the demand [D and D'] and supply [S and S'] curves of shares of stock.Figure 17.2 The figure given below shows the demand [D and D'] and supply [S and S'] curves of shares of stock.Figure 17.2    -Which of the following factors led to the housing bubble in the U.S. in 2006? -Which of the following factors led to the housing bubble in the U.S. in 2006?

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