Explaining Households Supply of Financial Capital
With this skill you will learn
- Expected Rate of Return vs Actual Rate of Return
- Bank Accounts
- Bonds: Calculating the Bond yield, high yield bonds vs junk bonds,
- Mutual Funds
- Housing and Other Tangible Assets
- Explaining the Tradeoffs between Return and Risk
Explaining Households Supply of Financial Capital Questions
13. Consider the following statements with respect to stock markets in the U.S.
a. The Wilshire 5000 tracks the stock prices of essentially all U.S. companies that have stock the public can buy and sell.
b. The New York Stock Exchange monitors the performance of stocks that are traded on that exchange in New York City.
c.The Nasdaq stock market includes about 3,600 stocks, with a concentration of technology stocks.
d. All of the above statements are true
15. The household investment choices listed here display a tradeoff between the expected return and the degree of risk involved. Consider the following statements.
a. Bank accounts have very low risk and very low returns
b. Bonds have higher risk but higher returns
c. Stocks are riskiest of all but have the potential for still higher returns.
d. all of these are true