Describe two main differences between bonds and stocks
What will be an ideal response?
Stocks represent ownership of the issuing company, whereas bonds are a debt of the issuing company. Because stocks represent ownership of a company, a stockholder has a claim on (part) of the company's profit. Bondholders, however, have no claim on the company's profit. Instead, they have a promise by the company to pay them specified amounts of money at specified dates in the future.
Economics
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A bank seeks a 4% real return on its loans and predicts a 4% annual rate of inflation. It should therefore charge a nominal interest rate of
A) 0%. B) 1%. C) 4%. D) 8%. E) 12%.
Economics
The cross elasticity of demand for substitute goods must
a. be greater than one b. be less than one c. be zero d. exceed zero e. be negative
Economics