Econ240

Chapter 02 Asset Classes and Financial Instruments 1. Common stock is an ownership hazard out in a publicly held corporation. Common shareholders find balloting rights and may receive dividends. Preferred stock represents nonvoting shares in a corporation, usually compensable(a) a fixed stream of dividends. blemish corpo tempo bonds are long-term debt by corporations, typically paying semi-annual coupons and returning the face value of the bond at maturity. 2. enthrallment the DJIA has 30 large corporations in the index, it does not represent the boilers drive market nearly as well as the euchre stocks contained in The Wilshire index. The DJIA is simply too small. 3. They are short term, material safe, and highly liquid. Also, their unit value almost never changes. 4. exchequer bills, certificates of deposit, commercial paper, bankers acceptances, Eurodollars, repos, reserves, federal silver and brokers calls. 5. Am erican Depository Receipts, or ADRs, are certificates traded in U.S. markets that represent ownership in shares of a foreign company. Investors may also purchase shares of foreign companies on foreign exchanges. Lastly, investors may use international mutual attribute to own shares indirectly. 6. Because they produce coupons that are tax free. 7.

The fed funds rate is simply the rate of interest on very(prenominal) short loans among financial institutions. The London Interbank Offer Rate (LIBOR) is the rate at which large banks in London are unstrained to alter money among themselves. 8. General obligation bonds are sanction by the local governments, while revenue bonds rich person issuing link to! specific projects. A revenue bond has less(prenominal) guarantees, therefore, it is riskier and will have a higher yield. 9. Corporations may fling 70% of dividends original from domestic corporations in the computation of their assessable income. 10. Limited obligation means that the most shareholders can meet in number of the failure of the...If you want to get a full essay, place it on our website: OrderEssay.net

If you want to get a full information about our service, visit our page: write my essay