1. Joe E. Conomist purchased 100 shares of IBM corporation in 2011 for $10,000. In 2014, Joe sold these shares to Sally Forth for $15,000. How would this sale of stock in 2014 affect IBM corporation?
- IBM makes $5,000 in profit.
- IBM invests $5,000 in capital equipment
- IBM suffers a loss of $5,000.
- IBM is unaffected.
2. When savers buy securities from borrowers without the assistance of any third-party, they are using
direct finance
indirect finance
a secondary market
a financial intermediary
3. The quantity demanded of a security is QD= 220 - 0.2b and the quantity supplied of it is QS=100 + 0.2b. The equilibrium price of the security is
- $300
- $280
- $420
- $500
4. Higher the rate of inflation
- slower will be the rate at which money will lose value
- lower will be the will to spend money
- lower will be the will to hold money
- lower will be the will to invest money