Ch. 15 EOC Problems: Finance

lends out/spends/saves, lower/equivalent/higher

lends out, higher

c

a. b b. a

a. a b. d

c

d

a

a. P/E ratios, stock prices of other bank stocks, sum of discounted future profits for JPM, total number of shares outstanding for JPM

a. Information needed to assess fundamental value: sum of discounted future profits for JPM, total number of shares outstanding for JPM Information not needed to assess fundamental value: stock prices of other bank stocks, P/E ratios b. c

concurrent with/after/ahead of, period of strong economic growth/economic downturn, after/ahead of/concurrent with, period of strong economic growth/economic downturn, a cause of than an effect/an effect of than a cause

ahead of, period of strong economic growth, ahead of, economic downturn, an effect of than a cause

a

a, b

a. a b. c

a. e b. b c. a d. b

a. did not change/increased/reduced b. did not change/increased/reduced

a. reduced b. did not change

defaulted/repaid/matured/sold, currently owns/originally purchased/originally issued

sold, currently owns

a. term risk/savers risk/default risk/liquidity risk b. term risk/savers risk/default risk/liquidity risk c. term risk/savers risk/default risk/liquidity risk

a. default risk b. term risk c. liquidity risk

You want a high return and are not concerned about risk., You want a guaranteed, regular payment from your investment., You would like to participate in how companies you invest in are managed., You are worried about losing money if a company declares bankruptcy.

Stocks: You want a high return and are not concerned about risk., You would like to participate in how companies you invest in are managed. Bonds: You want a guaranteed, regular payment from your investment., You are worried about losing money if a company declares bankruptcy.

a. 30.90 b. 3.12 c. 67.2

a. 143.49 b. 28.23 c. d

a. a b. d

a. market fluctuations/stock prices/market trades/financial bubbles, levels of awareness/previous trades/publicly available information

a. stock prices, publicly available information b. c

5506.14