Answered: What is the capital market (include in…

What is the capital market (include in your answer the characteristics of the capital market and the types of securities that are traded in the capital market)?

Principles of Economics 2e

2nd Edition

ISBN:9781947172364

Author:Steven A. Greenlaw; David Shapiro

Publisher:Steven A. Greenlaw; David Shapiro

Chapter17: Financial Markets

Section: Chapter Questions

Problem 33CTQ: Explain what happens in an economy when the financial markets limit access to capital. How does this...

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Q5.Amir Khan has a savings bank account in HDFC bank, some days back he had a meeting with one Relationship Manager of HDFC bank regarding some investments. During their discussion he came to know that economic factors play very important role and economic factors can affect security price movement or return on investments. Amir Khan has a little knowledge about investment and impact of economy on investments. He has some spare fund and he wants to invest it but now he wants to know that how economic factors can play an important role? Explain him the factors and relation examples between economy factors and stock price with the help of examples.
What are the financial markets? What are the parties of the capital market?Explain it.
1
Activities in financial markets have direct effects on individual wealth, the behavior of business, and the efficiency of the economy. Three financial markets deserve particular attention: the bond market, the stock market, and the foreign exchange market. Can you explain how each one of these markets affects people's wealth, business behavior, and efficiency of the economy? Be specific about the relationship between these markets and their impact on the above-mentioned variables.
Which of the following is NOT a type of financial market? Select one: a. Money and capital markets, b. The Caribbean exchange market. c. Debt and equity markets and d. Primary and secondary markets,
1. The opportunity cost of holding money Suppose you've just inherited $10,000 from a relative. You're trying to decide whether to put the $10,000 in a non-interest-bearing account so that you can use it whenever you want (that is, hold it as money) or to use it to buy a U.S. Treasury bond. The opportunity cost of holding the inheritance as money depends on the interest rate on the bond. For each of the interest rates in the following table, compute the opportunity cost of holding the $10,000 as money. Interest Rate on Government Bond Opportunity Cost (Dollars per year) (Percent) 10 What does the previous analysis suggest about the market for money? The quantity of money demanded increases as the interest rate rises. The quantity of money demanded decreases as the interest rate rises. The supply of money is independent of the interest rate.
Answer question 38
Explain what happens in an economy when the financial markets limit access to capital. How does this affect economic growth and employment?
Suppose that the city of New York issues bonds to raise money to pay for a new tunnel linking New Jersey and Manhattan. An investor named Susan buys one of the bonds on the same day that the city of New York pays a contractor for completing the first stage of construction. Is Susan making an economic or a financial investment? What about the city of New York?
Financial capital includes A. money, stocks, and bonds, which are capital because they provide businesses with financial resources O B. money, stocks, and bonds, which are not capital because they are not used to produce goods and services O C. banks and credit unions, which are capital because they are used to produce financial services O D. the nation's banking system, which is capital because it is the backbone of the economy