Determine rates of return in a market economy


Question 1. Discuss the four main factors that determine rates of return in a market economy.

Question 2. Briefly list the problems associated with profit maximization as the chief goal of corporate managers.

Question 3. Suppose that the exchange rate is $0.2970 to the Israeli shekel. How could you make arbitrage profits with $10,000 if the dollar price of gold is $200 per ounce and the shekel price is 750 ILS per ounce?

Question 4. Does growth per se add value to the current price of a share? If not what does add value to a share's current price?

Question 5. Describe the main features of forward contracts. How do forward contracts differ from futures contracts?

Question 6.  Explain why the market price of a company's stock does not necessarily equal its book value.

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Finance Basics: Determine rates of return in a market economy
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