1. Financial institutions in the U.S. economy Suppose Edu decides to use $8,000 currently held as savings to make a financial investment. One method of making a financial investment is the purchase of stock or bonds from a private company. Suppose Warm Breeze, a cloud computing firm, is selling bonds to raise money for a new lab. This practice is called finance. Buying a bond issued by Warm Breeze would give Edu the firm. In the event that Warm Breeze runs into financial difficulty, will be paid first. Suppose instead Edu chooses to buy 250 shares of Warm Breeze stock. Which of the following statements are correct? Check all that apply. Expectations of a recession that will reduce economywide corporate profits will likely cause the value of Edu's shares to decline. The price of his shares will rise if Warm Breeze issues additional shares of stock. ☐ An increase in the perceived profitability of Warm Breeze will likely cause the value of Edu's shares to rise. Alternatively, Edu could undertake their financial investment by purchasing bonds issued by the U.S. government. Assuming that everything else is equal, a corporate bond issued by an electronics manufacturer most likely pays a municipal bond issued by a state. interest rate than a
1. Financial institutions in the U.S. economy Suppose Edu decides to use $8,000 currently held as savings to make a financial investment. One method of making a financial investment is the purchase of stock or bonds from a private company. Suppose Warm Breeze, a cloud computing firm, is selling bonds to raise money for a new lab. This practice is called finance. Buying a bond issued by Warm Breeze would give Edu the firm. In the event that Warm Breeze runs into financial difficulty, will be paid first. Suppose instead Edu chooses to buy 250 shares of Warm Breeze stock. Which of the following statements are correct? Check all that apply. Expectations of a recession that will reduce economywide corporate profits will likely cause the value of Edu's shares to decline. The price of his shares will rise if Warm Breeze issues additional shares of stock. ☐ An increase in the perceived profitability of Warm Breeze will likely cause the value of Edu's shares to rise. Alternatively, Edu could undertake their financial investment by purchasing bonds issued by the U.S. government. Assuming that everything else is equal, a corporate bond issued by an electronics manufacturer most likely pays a municipal bond issued by a state. interest rate than a
Chapter1: Making Economics Decisions
Section: Chapter Questions
Problem 1QTC
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Transcribed Image Text:1. Financial institutions in the U.S. economy
Suppose Edu decides to use $8,000 currently held as savings to make a financial investment.
One method of making a financial investment is the purchase of stock or bonds from a private company.
Suppose Warm Breeze, a cloud computing firm, is selling bonds to raise money for a new lab. This practice is called
finance. Buying a
bond issued by Warm Breeze would give Edu
the firm. In the event that Warm Breeze runs into financial
difficulty,
will be paid first.
Suppose instead Edu chooses to buy 250 shares of Warm Breeze stock.
Which of the following statements are correct? Check all that apply.
Expectations of a recession that will reduce economywide corporate profits will likely cause the value of Edu's shares to decline.
The price of his shares will rise if Warm Breeze issues additional shares of stock.
☐ An increase in the perceived profitability of Warm Breeze will likely cause the value of Edu's shares to rise.
Alternatively, Edu could undertake their financial investment by purchasing bonds issued by the U.S. government.
Assuming that everything else is equal, a corporate bond issued by an electronics manufacturer most likely pays a
municipal bond issued by a state.
interest rate than a
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