From the viewpoint of the individual investor, are stocks or bonds riskier? Explain.
What will be an ideal response?
Stocks are riskier in the sense that there is no guaranteed return. Individuals buy stock if they believe returns will be sufficiently high to justify the risk. Bonds give a known payment, plus return of principal (unless the company goes bankrupt). The risk to the bondholder is that inflation may eat away at the principal, and rising interest rates may adversely affect the bond’s value in secondary markets.
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Which of the following is NOT one of the components for computing GDP based upon the income approach?
A) investment B) corporate profits C) compensation of employees D) net interest
All of the following location characteristics can result in higher worker salaries except which one?
A) short commute time B) poor climate C) high cost of living D) unpleasant work conditions
The law of demand illustrates a(n) ____ relationship between price and ____
a. direct; quantity demanded b. inverse; quantity demanded c. inverse; demand d. direct; demand
A monopolist will always charge the highest price it can get.
Answer the following statement true (T) or false (F)