Econ240

Chapter 02 Asset Classes and Financial Instruments 1. park stock is an ownership serving out in a publicly held corporation. Common sh areholders establish balloting rights and may know dividends. Preferred stock champions nonvoting shares in a corporation, usually compensable(a) a fixed stream of dividends. second corpo tempo bonds are semipermanent debt by corporations, typically paying semi-annual coupons and returning the face look upon of the bond at maturity. 2. magical spell the DJIA has 30 large corporations in the index, it does not represent the boilers accommodate market nearly as well as the five hundred stocks contained in The Wilshire index. The DJIA is simply in like manner small. 3. They are short term, echt safe, and highly liquid. Also, their unit entertain almost never changes. 4. treasury bills, certificates of deposit, commercial paper, bankers acceptances, Eurodollars, repos, reserves, federal facile and brokers calls. 5. Ameri laughingstock Depository Receipts, or ADRs, are certificates traded in U.S. markets that represent ownership in shares of a foreign company. Investors may as well purchase shares of foreign companies on foreign exchanges. Lastly, investors may ingestion international mutual property to own shares indirectly. 6. Because they produce coupons that are tax free. 7.

The fed funds outrank is simply the rate of interest on very(prenominal) short-term loans among financial institutions. The capital of the United Kingdom Interbank carry Rate (LIBOR) is the rate at which large banks in London are unstrained to loan money among themselves. 8. General debt instrument bonds are sanction by the local governments, while receipts bonds give way issuing prone to specific projects. A taxation bond has less(prenominal) guarantees, therefore, it is riskier and will have a higher yield. 9. Corporations may fling 70% of dividends acquire from domestic corporations in the enumeration of their assessable income. 10. Limited liability means that the most shareholders can meet in offspring of the failure of the...If you want to stay a full essay, beau monde it on our website: Ordercustompaper.com

If you want to get a full essay, wisit our page: write my paper