3. Explain the roll of debt and equity markets in the economy.
How do they interact...
3. Explain the roll of debt and equity markets in the economy.
How do they interact with both Primary and Secondary Markets? What
roles do debt and equity markets and primary and secondary markets
play in the “flow of funds?”
(1) What is the market economy? How do the financial markets
interact with product and labor markets to allocate scarce
resources efficiently in the market economy?
Assume perfect capital markets. Since the debt claim is senior
to the equity claim, debt is cheaper than equity. Therefore, a
simple strategy to reduce the cost of capital would be to take on
as much debt as possible. DISCUSS this claim concisely.
What is Balassa-Samuelson? Explain how comparative advantage, productivity, and domestic labor markets interact to generate this effect. Explain how this effect would change if all goods were tradable.
(1) Explain the difference between debt and equity capital
(2) Give 3 examples each of debt security or capital, hybrid
security or capital, and equity security or capital.
(3) What are the benefits of using debt capital?
(4) What are the costs of using debt capital?
(5) Identify six theories of capital structure and provide brief
explanation
The Economics of Small Business Finance: The Roles of Private
Equity and Debt Markets in the Financial Growth Cycle by Allen N.
Berger and Gregory F. Udell
Synopsis
The article, The Economics of Small Business Finance: The Roles
of Private Equity and Debt Markets in the Financial Growth Cycle by
Allen N. Berger and Gregory F. Udell, discuss the economics of
small business financing in private and debt markets. The article
shows the sources of small business finance and how...
Money markets are financial markets where long-term debt and
equity securities are bought and sold, while capital markets are
financial markets where short-term debt securities are bought and
sold. T or F
a) What is WaIras's Law. Explain how equilibrium is
achieved in an economy with 5 markets.
b) . Supposing that Malaysia is adopting the fixed
exchange rate system. By assuming that the Purchasing Power Parity
holds, and based on IS-LM and AD-AS diagrams, explain what would
happen to relative prices if the government increases or decreases
its expenditure.
c) ) In view of the Walras's law, if n-1 markets are
already specified. the specification of bond market would have been...