Considering the return an investor requires from a stock, what are the two components that make up that return? Briefly explain each of these components.
What will be an ideal response?
We saw in the chapter; that the required stock return (i) = risk-free return (rf) + risk premium (rp). The risk-free return is the interest rate the investor could earn on say a U.S. Treasury bonD) The risk premium is the compensation the investor requires due to the fact that the future selling price of the stock is uncertain
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Miniville is an isolated town located on the southern shore of Lake Condescending, a very large lake. The western edge of Miniville is adjacent to impassable mountains and there are no towns or businesses for many miles to the east. The 300 residents of Miniville are evenly distributed along 3 miles of shoreline on the lake, east of the mountains. Lake Shore Drive, the only street in town, provides access to Miniville's homes and businesses. All residents live between the lake and the street; businesses locate on the other side of the street. Lake Shore Drive is 3 miles long, and the points labeled A, B, and C are 1, 2, and 3 miles from the western end of Lake Shore Drive, respectively. All residents of Miniville shop at the store located closest to their homes. src="https://sciemce.com/media/4/ppg__rrr0818190951__f1q363g1.jpg" alt="" style="vertical-align: 0.0px;" height="117" width="538" />If the first store to open in Miniville is located at A, to maximize the number of customers it attracts, the next store to open should locate:
A. at B.
B. at C.
C. just west of A.
D. just east of A.
The New York Stock Exchange handles only about 10 percent of all stock market transactions in the United States.
Answer the following statement true (T) or false (F)
A fund whose goal is to invest in economic development and job creation in impoverished areas is a/an ______.
A) impact-investment fund B) community fund C) microlending fund D) inward-focused fund
Identify whether each of the following policies is an example of (1 ) a discretionary fiscal policy, (2 ) an example of an automatic stabilizer, or (3 ) not a fiscal policy
a. Food stamps b. Government spending on rebuilding airports c. Tax credits for the purchase of energy efficient appliances d. The extension of the "Bush tax cuts" of 2001 and 2003 e. Changing the required reserve ratio f. The bailout of large financial institutions during the financial crisis g. The progressive income tax system