Essentials of Economics (MindTap Course List)
8th Edition
ISBN: 9781337091992
Author: N. Gregory Mankiw
Publisher: Cengage Learning
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Question
Chapter 19, Problem 6PA
To determine
Selection of stocks.
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The price these buyers are willing to pay for the stock is called _____________.
which kind of shares would you expect to pay higher average return: shares in an industry that is very sensitive to economic conditions (such as an automaker) or shares in an industry that is relatively insensitive to economic conditions (such as water company)? why?
You are planning to open an internet business selling stock market analysis, and are offering two options to consumers:
A: You charge $150 per year. This grants access to all of your basic financial literacy information, as well as 12 months of access to your stock market analysis memos, which you provide monthly.
B: You charge $50 for access to your basic financial literacy information, then charge $10 each for your monthly stock market analysis memos.
Which one is the best offer?
Chapter 19 Solutions
Essentials of Economics (MindTap Course List)
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Similar questions
- In which two markets can you buy stock? Compare and contrast these two markets. What is an IPO?arrow_forwardFind out change in stock if closing stock is $60,000 and opening stock is $34,000?arrow_forwardIf you're authorized with some invested capital, what is the potential market that you're most interested in? Why you choose this market?arrow_forward
- Savings is a stock variable True/Falsearrow_forwardYou are a financial planner. One of your clients is 40 years old and wants to begin saving for retirement. You advise her to put $5,000 a year into the stock market. You estimate that the market's effective return will be, on average, 12 percent a year. Assume the investment will be made at the end of the year. What is the value of her savings after 20 years.You are a financial planner. One of your clients is 40 years old and wants to begin saving for retirement. You advise her to put $5,000 a year into the stock market. You estimate that the market's effective return will be, on average, 12 percent a year. Assume the investment will be made at the end of the year. What is the value of her savings after 20 years. Note:- Do not provide handwritten solution. Maintain accuracy and quality in your answer. Take care of plagiarism. Answer completely. You will get up vote for sure.arrow_forwardSuppose you buy a share of stock for $10 and sell it for $20; your profit is thus $10. If that happens within a year, your rate of return is an impressive 100% ($10/$10 = 1). If it takes five years, what would be the rate of return on your investment? (See Figure.)arrow_forward
- Suppose you buy a house for $250,000. One year later, the market price for the house has fallen to $200,000. What is the return on your investment in the house if you made a down payment of 10 percent and took out a mortgage loan for the other 90 percent?arrow_forwardWhat is a bond? A certificate representing a loan from an investor to a corporation or government entity that makes fixed payments for a set time and eventually pays back the loan in full. A certificate of ownership in a corporation with the right to a percentage of the earnings. A payment for an investor to a corporation for the rights to future profits. A group of stocks sold together for a set price.arrow_forward
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