which one of the following is likely to have a negative effect on stock prices? course hero

How do stock prices affect the level of economic activity?

Oct 05, 2016 · See Page 1. 10. Which two of the following have the greatest effect on stock option prices? I. volatility of underlying stock price II. time to option maturityIII. underlying stock price IV. option strike price A. I and II onlyB. I and IV only C. II and III only D. II and IV only E. III and IV only. E. III and IV only.

What are the effects of false economic analysis on stock prices?

Jan 11, 2017 · d. Market risk is important, but it does not have a direct effect on stock prices because it only affects beta. e. Simulation analysis is a computerized version of scenario analysis where input variables are selected randomly on the basis of their probability distributions. e.

How do shocks to the economy occur?

Chapter 6 HW. 1.refer to unexpected changes in the ability of firms to produce and sell goods and services. 2.always have a negative effect on the economy. 3.cause fewer short-run fluctuations than supply shocks. 4.refer to unexpected changes in the desires of households and businesses to buy goods and services.

What are the effects of a positive demand shock?

Apr 16, 2017 · 20. When a liquidity trap situation exists, we know that A. an open market operation will have no effect on the supply of money. B. an open market operation will have no effect on the monetary base. C. fiscal policy will have no effect on the demand for goods. D. expansionary monetary policy will be deflationary. E. none of the above

What is the purpose of statement of cash flows?

The statement of cash flows is used to assess a company's long-term solvency. The income statement indicates how successfully a company has utilized its assets. Positive cash flow from investing activities is typical of firms experiencing healthy growth.

Is fundamental analysis profitable?

Fundamental analysis can only be profitable if some securities are at least temporarily mispriced. Markets can only be efficient if many competent analysts are performing fundamental analysis. A) a stock's price is based on its past cash flows rather than on anticipated future cash flows.

What are demand shocks?

Demand shocks. 1.refer to unexpected changes in the ability of firms to produce and sell goods and services. 2.always have a negative effect on the economy. 3.cause fewer short-run fluctuations than supply shocks. 4.refer to unexpected changes in the desires of households and businesses to buy goods and services .

How do banks promote economic growth?

Banks and other financial institutions. 1.promote economic growth by helping to direct household savings to businesses that want to invest. 2. often hinder economic activity by creating barriers between household savers and firms wanting to invest in capital goods.

What is investment in economics?

4. are the primary investors in equipment, factories, and other capital goods. 1. promote economic growth by helping to direct household savings to businesses that want to invest. When economists refer to "investment," they are describing a situation where. 1.people are buying shares of corporate stock.

What are the shocks of the economy?

Shocks to the economy occur when. 1. actual economic events do not match what people expected. 2. government takes a more active role in the economy. 3. stock prices rise by more than 10 percent per year. 4. prices are flexible. 1. actual economic events do not match what people expected. Refer to the graphs.

What are the causes of recession?

1. current income exceeds current spending. When demand shocks lead to recessions, it is mainly due to. Multiple Choice. 1. government regulations that prevent firms from adjusting output in response to the shocks. 2. unexpected changes in the supply of goods and services. 3. price inflexibility.

What is financial investment?

Financial investment refers to the purchase of assets for financial gain; economic investment refers to the purchase of newly created capital goods. 3. Financial investment refers to the purchase of financial assets only; economic investment refers to the purchase of any new or used capital goods. 4.