Question

1. Financial institutions in the U.S. economy Suppose Edison would like to use $3,000 of his savings to make a financial Investment. One way of making a financial investment is to purchase stock or bonds from a private company. Suppose TouchTech, a hand-held computing firm, is selling stocks to raise money for a new lab-a practice known as finance. Buying a share of Touch Tech stock would give Edison the firm. In the event that TouchTech runs into financial difficulty, will be paid first. Suppose Edison decides to buy 100 shares of Touch Tech stock. Which of the following statements are correct? Check all that apply. The Dow Jones Industrial Average is an example of a stock exchange where he can purchase TouchTech stock. Touch Tech earns revenue when Edison purchases 100 shares, even if he purchases them from an existing shareholder. Expectations of a recession that will reduce economywide corporate profits will likely cause the value of Edison's shares to decline. Alternatively, Edison could make a financial investment by purchasing bonds issued by the government of Japan. interest rate Assuming that everything else is equal, a bond issued by a government that is engaged in a civil war most likely pays a than a bond issued by the government of Japan. Grade it Now Save & Continue

Answer 1

1. Touchtech a hand held computing frim is selling stocks to raise money for a new lab a practice known as EQUITY Finance.

In equity finance the money is raised by firm through selling shares to investors.

2.Buying a share of Touchtech stock would give Edison A CLAIM TO PARTIAL OWNERSHIP IN the firm.

Buying shares give part in ownership in business.

3. In the Event that Touch tech runs into financial difficulty THE BONDHOLDERS will be paid first.

Bondholders are secured than equity and are paid first in case of business insolvency.

4.Correct statements are -

a.. The Dow jones Industrial Average is an example of a stock exchange where he can purchase Touchtech stock.

b. Expectations of recession that will reduce economy wide corporate profits will likely cause the value of Edison shares to decline.

5. A bond Issued by goverment that is engaged in a civil war most likely pays a HIGHER interest rate than a bond issued by government of japan