What are some of the reasons that would make bond market prices would rally (go up)?Multiple ChoiceIf there was lots of bed economic news and if worried investors sold all of their stocks.This would happen if Iran detonated a nuclear bomb and if both Saudi Arabia and Egypt quickly bought nuclearweapons from Pakistan to counter the threat from Iran.If the COVID-19 virus pandemic got worse and caused the death of 100 million globally.All statements made above are true.

Bond prices generally rise when interest rates fall. When central banks lower interest rates or when…

Answered: What are some of the reasons that would…

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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Now suppose there is no financial intermediary to handle liquidity shocks. However, at t = 1 a market for bonds opens up and agents can trade their wealth at t = 1 for wealth at t = 2. Each bond pays 1 at t = 2 and its price is pM. Calculate the consumer's optimal investment decision IM at t = 0, the price of the bond pM, and the optimal consumption in the two states cM, cM. Compare the mutual fund and bond market allocations: are c4 and c bigger or smaller than cf and c, respectively?
In 2021, the Gamestop stock witnessed a sudden rally when a group of Subredditors on r/wallstreetbets decided to attack the hedge fund managers who were short on the stock, and thus aimed to shake the very foundation of Wall Street. The Subreddit influenced many ordinary people to buy the Gamestop stock via the Robinhood App leading to enormous losses for the hedge fund managers who had bet on the price to fall, as the price went up by whopping 1700% in a single week. Your friend exclaims: "I would never buy these trending stocks; their price is too volatile, as a single tweet or a comment thread may lead to the soaring or the plummeting of the prices in a jiffy; in other words, these stocks are too risky and useless for rational investors, they’re just good for regular social media followers and for those people who don’t know anything about finance but are just in to gamble!". How would you reply to such a line of reasoning?
Suppose interest rates on Treasury bonds rose from 5% to 9% as a result of higher interest rates in Europe. What effect would this have on the price of an average company's common stock? (Hint: in your explanation consider alternative investment to common stocks; a relatively riskless investment)
What would be concluded about the South African Mobile Phone sector between 2008 and 2011? A. The market was very depressed between the period 2008-2011 as cellular stocks remained below2008 prices through the period to 2011.B. The market was solid and prices were rising between 2008 and 2011C. Prices fell steadily but investors remained hopeful that the market was going to rebound in the nearto medium termD. The market crashed and plateaued between 2008 and 2011
Hi I need help with this problem fill in options for blank 1 is debt or equity fill in options for blank 2 is a claim to partial ownership In or an IOU, or promise to pay, from fill in options for blank 3 is the stock holders or Osvaldo and the other bondholders fill in options for blank 4 is higher or lower
Adam Smith is a portfolio manager with Point72 Investments, a U.S.-based asset management firm. Smith is considering using options to enhance portfolio returns and control risk. He asks his junior analyst, Tommy Lee, to help him. Lee collected and summarize the relationship between a European call option and various factors that might impact the call option value in Table 1. Which of the relationships shown in Table 1 below is incorrect? (Choose the best answer) Table 1 Impact of Increasing the Variables on put option value Variables Impact on put option value Stock price Decrease Strike Price Decrease Maturity Increase Volatility Increase Interest rate Decrease Dividend Increase Volatility and Stock Price Risk-free rate and Volatility Dividend and stock price Maturity and Strike Price Stock Price and Interest Rate
Describe Asset/Liability Models and explain why it is better than Value-at-Risk Models for Portfolio Management. List SIX (6) Preventable and Unpreventable risk that an organization operating in Ghana is likely to face As a result of the global financial crisis in the early 1980s, the Bank for International Settlements (BIS) set up a panel of eminent bankers to study the global financial system and make recommendations on how to make it more effective, efficient and robust. How have these recommendations assisted in strengthening the global financial and the Ghanaian banking System? In a table form, identify FIVE Key Risks Indicators that AFRICA WORLD AIRLINES, UCC and MTN GHANA face in their operations. On a separate table offer mitigating strategies for each of the identified risks from the previous table. Explain the weaknesses of Basel I Accord, the THREE (3) Pillars in Basel II Accord and the Five (5) identified risk areas under Basel III Accord. And explain why Basel II Accord…
H5. The bank have an incentive to value the new securities at a higher price because they will gain more. Is that a good or bad strategy? Explain why
If the Fed wants to decrease the money supply it will ______ Treasury securities in open market operations. Question 12 options: buy sell
Can you explain why the inflationary enviroment gives a higher incoem for shareholders in question C. The solution is also uploaded. Can you help explain it better
Investment advisors recommend risk reduction through international diversification. International investing allows you to take advantage of the potential for growth in foreign economies, particularly in emerging markets. Janice Wong is considering investment in either Europe or Asia. She has studied these markets and believes that both markets will be influenced by the U.S. economy, which has a 21% chance for being good, a 52% chance for being fair, and a 27% chance for being poor. Probability distributions of the returns for these markets are given in the accompanying table. Return Rates in Europe: Good, 10%; Fair, 4%; Poor, -3% Return Rates in Asia: Good, 24%; Fair, 4%; Poor, -18% a. Find the expected value and the standard deviation of returns in Europe and Asia. (Round intermediate calculations to at least 4 decimal places and final answers to 2 decimal places.)
Check my work The annual report for Mega Mills disclosed that 1 billion shares of common stock have been authorized. At the beginning of 2017, 785 million shares had been issued and the number of shares in treasury stock was 96 million. During 2017, the only common share transactions were that 19 million common shares were reissued from treasury and 25 million common shares were purchased and held as treasury stock. Required: Determine the number of common shares (a) issued, (b) in treasury, and (c) outstanding at the end of 2017. (Enter your answers in millions.) Number of Common Shares (in millions) |(a) Issued Stock |(b) Treasury Stock |(c) Shares Outstanding

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