Exam 27: Capital Markets

The demand curve for the shares of a company's stock slopes upward, since the higher the price of the stock, everything else the same, the higher the quantity of stock demanded.

If the earnings of Chopo Co.are lower than expected, the forecasts will be revised downward and the price of the company's stock will decline.

The demand curve for capital:

The unique alphabetic name that identifies a listed stock is known as the:

In order to induce risk averse people to invest in risky ventures, an additional sum of money is often paid to them along with the return.

The equity market is said to be an efficient market because it is difficult for an investor to continually earn above-normal profits.

According to the ratings given by Moody's and Standard and Poor's, _____ bonds are corporate bonds that carry the lowest risk and offer a lower yield.

The figure given below shows the demand curves [D₁ and D₂] and the supply curve [S₁] of capital. Figure 16.1 In Figure 16.1, if the demand curve for capital shifts to D₂, the equilibrium price and quantity of capital are:

When a new generation of computers that are faster and more powerful than the previous generation are introduced into the resource market:

A bubble or panic generally occurs in the stock market because of:

The amount that a risk averse person requires to take on risk is called:

During the stock market bubbles, the price/earnings [P/E] ratio:

A primary market refers to a market in which outstanding shares are bought and sold.

If the par value of a bond is $200, and the bid price of the bond is $90, it implies:

If $30 is paid for a share of stock and the earning per share is $3, how long will it take for the firm's earnings to add up to the purchase price?

Consider a mutual fund with a 6 percent back-end load that decreases to 0 percent in the seventh year.How much of the load will an investor have to bear if she sells it off in the second year?

Bonds and stocks act as complementary goods such that a rise in the price of one raises the demand for the other.

Stock prices often fail to correctly reflect complete information about a company in the long run.

NAVPS in the mutual fund table denotes:

A low P/E ratio of a stock means that the company issuing the stock is headed to trouble in near future.