Which one of the following is not resulted in capital formation? Mr. X buys the bonds of a company which develops new ports out of his savings Mr. X subscribes to equity shares of an airline company in their IPO Mr. X buys a piece of land to grow organic vegitables Mr. X buys gold on the expectation that Gold price is likely to increase

Which one of the following is not resulted in capital formation? Mr. X buys the bonds of a company which develops new ports out of his savings Mr. X subscribes to equity shares of an airline company in their IPO Mr. X buys a piece of land to grow organic vegitables Mr. X buys gold on the expectation that Gold price is likely to increase

Essentials Of Investments

11th Edition

ISBN:9781260013924

Author:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.

Publisher:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.

Chapter1: Investments: Background And Issues

Section: Chapter Questions

Problem 1PS

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Similar questions

Mega Corporation has been operating successfully for a number of years and needs additional capital to meets its expansion strategy. Warren Tuffett, a wealthy businessman, contributes $100 million of cash in exchange for shares in Mega. Mega will need to recognize income for the contribution. True or False?
Capital refers to wealth in the form of money or property that can be used to produce more wealth a. False O b. True
John only investment is in a unit trust. John strongly believes that he will have better returns by investing in the stock market (SGX). He has heard of SPACs, or special purpose acquisition companies, which have become very popular recently. Examine what SPACs are and appraise whether an investment in a SPAC is suitable for Terrence.
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Eric is interested to invest in shares. However, he realizes there would be a risk if he invests in only similar industry. Identify and explain the concept that Eric should apply to encounter this risk.
In a few sentences, answer the following question as completely as you can. You are discussing stock valuation techniques with your broker. You mention that your Finance professor stated that “a stock that will never pay a dividend is valueless.” Your broker says this is not true because you can always sell the stock to someone else (thus, a capital gain is possible) a share of stock represents a share of ownership in something tangible (i.e., the issuing firm).Argue for or against your broker’s position.
Assume that you’ve just inherited $100,000 and wish to use all or part of it to make a real estate investment. Would you invest directly in real estate, or indirectly through something like a REIT? Explain. Assuming that you decided to invest directly, would you invest in income-producing property or speculative property? Why? Describe the key characteristics of the types of income producing or speculative property you would seek. What financial and nonfinancial goals would you establish before beginning the search for suitable property? If you decide to invest in real estate indirectly, which type(s) of securities would you buy, and why?
Please answer with reason for all why the option is correct and why the other options are incorrectPlease answer correct otherwise skip it There are two potential investments being considered by John Deere. The first produces $5,000 of tax-exempt income. The second produces income that will be subject to tax at a rate of 20%. Which of the following statements is true regarding Deere's choice? Group of answer choices a) If the second investment generates $7,000 of before-tax income, Casey should choose the second investment. b) Both, if the second investment generates $5,800 of before-tax income, Casey should choose the first investment and if the second investment generates $7,000 of before-tax income, Casey should choose the second investment are true. c) Casey should always choose the first investment because it minimizes tax costs. d) If the second investment generates $5,800 of before-tax income, Casey should choose the first investment.
Assume Louise has inherited a large sum of money and wish to use it to make a real estate investment. She is a working professional in her late 30s. a. Would you recommend her to invest in income property or speculative property? Why? Describe the key characteristics of the income or speculative property on which she would focus her search. b. Louise has studied economics and knows about demand and supply, yet she doesn’t understand how to apply them to an investment analysis. Advise Louise in a practical way, how she might incorporate demand and supply into an investment analysis of property investment?
Choose option a,b,c,d,e for the following: Question 4 - Your income is exempt from taxes. Considering this fact, which of the following is true? a. You will always prefer your firm to retain its earning and grow faster so that you can enjoy capital gains. b. You will always choose your stocks bases on whether they offer a high or a low dividend payout. c. You will always go for low dividend – high growth stocks. d. You will want to invest in tax free government bonds. e. You will be indifferent between receiving dividends or capital gains.
Mr. Hatem wants to invest his funds in a non-banking finance company. In which of the following company he cannot invest his funds? O a. General Insurance Company O b. Diamond Leasing Company O c. Bank Dhofar O d. None of these

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