Which of the following statements is true?
A) A stock can possibly pay dividends forever, but bonds have a fixed number of payments.
B) Differences of opinion about a bond's future may vary considerably but there is less difference about a stock's future.
C) The future growth of a stock is more certain than the payments of a bond.
D) Bonds represent partial ownership in a firm but stocks do not.
Answer: A
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Which of the following would cause an increase in aggregate demand (AD)?
A) an increase in interest rates B) a decrease in taxes C) a decrease in price levels D) a rise in the foreign exchange value of the dollar
Banks can lower their liquidity risk by having more __________ on their balance sheet
A) government securities B) transactions deposits C) loans D) savings deposits
What is the free-rider problem?
When voters pay taxes in proportion to the benefits they receive from government projects,
a. efficient projects will tend to be opposed by a majority of voters. b. inefficient projects will often be favored by a majority of voters. c. projects that are efficient will tend to be favored by an overwhelming majority of voters. d. democratic political decision making can be expected to work poorly.