1. Why is it important to understand the larger financial picture of the institution and not just your own unit's financial picture? (higher education)
2. At what stage of the business cycle is the yield curve most likely to exhibit the steepest upward slope? Provide and explain three reasons why this is true. In the context of the liquidity preference theory, what does a flat yield curve imply about the expected future growth of the economy?
3. Fox Co. bought 1,000 shares of Owl Co. common stock, after which Owl had 10,000 shares authorized, 9,000 shares issued, and 8,000 shares outstanding. Fox expects to hold this stock for at least 9 months. When could Fox report a gain on its income statement?
When Owl reports net income
When Fox sells Owl common stock
When Owl declares common stock dividends
When the market price of Owl common stock increases