Question

In: Finance

1. True or False? The author contends that every financial meltdown includes a little understood "financial...

1. True or False? The author contends that every financial meltdown includes a little understood "financial contraption" that increases overall market leverage.

2. True or False? The purchase of United Copper shares by Otto and Arthur Heinz was a successful short squeeze that resulted in a significant increase in the per share price of United Copper and a boost in the Dow Jones Industrial Average.

3. True or False? The 1907 anti-trust ruling against Standard Oil, which included massive fines, would prove to be a significant factor leading to the Panic of 1907.

4. True or False? May 9, 1901 became known as "Blue Thursday," the day IBM, known as "Big Blue," lost more than 20% of its market value.

Solutions

Expert Solution

Q1: True or False? The author contends that every financial meltdown includes a little understood "financial contraption" that increases overall market leverage.

Ans: False: As during financial contraption period where investor have to nothing do with the market. Market poses a great risk on the investment and it creates a threat on future return on investment for an investor. So it creates a null leverage or no leverage position in market.

Q2: True or False? The purchase of United Copper shares by Otto and Arthur Heinz was a successful short squeeze that resulted in a significant increase in the per share price of United Copper and a boost in the Dow Jones Industrial Average.

Ans: False: It decreased the per share price of united copper. As after purchase otto and heinz corporation began to collapse and share price drops drastically.

Q3: True or False? The 1907 anti-trust ruling against Standard Oil, which included massive fines, would prove to be a significant factor leading to the Panic of 1907.

Ans: False: As it was a Banker;s panic.Factors of panic was Trust companies shares were fell down and brokers didnot get their money , which was economic recession of banks and trust companies.

Q4: True or False? May 9, 1901 became known as "Blue Thursday," the day IBM, known as "Big Blue," lost more than 20% of its market value.

Ans:False: It was financial crisis due to Share price of northern pecific rose very high that posed threat on london stock exchange fell price of share.


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