Problem 1
Use each of the three terms below in a sentence that illustrates the meaning of the term: a. coupon rate b. maturity c. yield
Problem 1
Explain the difference between the terms in each of these pairs. a. savings investment b. capital market money market c. primary market secondary market
Problem 2
Are owners of common stock generally more interested in dividends or capital gains? Why?
Problem 2
What is the purpose of the financial system?
Problem 2
What does par value represent to the issuer of a bond?
Problem 3
How would the risk of investing in a single stock compare with the risk of investing in a mutual fund? Why?
Problem 3
Why do banks receive financial assets when they make loans?
Problem 4
What is the difference between a bear market and a bull market?
Problem 4
How does a mutual fund serve as a financial intermediary?
Problem 4
How is diversification related to risk and return?
