Suppose your employer offers to match funds you place into a savings plan as long as you purchase the company stock and hold it for at least three years. Which of the following is true?
What will be an ideal response?
It can be attractive to put funds into a plan like this but you should sell your company stock when permitted in order to diversify your portfolio.
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Which of the following explains why the demand for loanable funds is negatively related to the real interest rate?
A) A lower real interest rate makes more investment projects profitable. B) Consumers are willing to spend less and hence save more at higher real interest rates. C) Interest rate flexibility in financial markets assures an equilibrium in which saving equals investment. D) All of the above are reasons why the demand for loanable funds is negatively related to the real interest rate.
Currency devaluations hurt
a. Consumers but help suppliers b. Suppliers c. Suppliers but help consumers d. None of the above
When is debt financing most likely to harm future generations of Americans?
a. When the debt is held by domestic investors. b. Any time the debt is held by foreign investors. c. When the debt is held by foreign investors and the funds are channeled into productive investment projects. d. When the debt is held by foreign investors and the funds are used to finance either current consumption or unproductive investments.
Graphically, deadweight loss is shown by the:
A. welfare loss rectangle. B. welfare loss triangle. C. consumer surplus loss triangle. D. tax revenue rectangle.