1. Financial institutions in the U.S. economy Suppose Nick would like to invest $9,000 of his...

1. Financial institutions in the U.S. economy

Suppose Nick would like to invest $9,000 of his savings.

One way of investing 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 TouchTech stock would give Nick the firm. In the event that TouchTech runs into financial difficulty, will be paid first.

Suppose Nick decides to buy 100 shares of TouchTech stock.

Which of the following statements are correct? Check all that apply.

The price of his shares will rise if TouchTech issues additional shares of stock.

An increase in the perceived profitability of TouchTech will likely cause the value of Nick's shares to rise.

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

Alternatively, Nick could invest by purchasing bonds issued by the U.S. government.

Assuming that everything else is equal, a municipal bond issued by a state most likely pays a interest rate than a corporate bond issued by an electronics manufacturer.

Expert Solution

Rahul Sunny answered 2 years ago

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