This preview shows page 1. Sign up to view the full content.
Unformatted text preview: b. Risk requires compensation • Investors must be paid to assume risk c. Information is the Basis for Decisions • Stock exchanges are organized to eliminate the need for costly information gathering, facilitating the exchange of securities d. Markets Determine Prices and Allocate Resources • The higher the price investors are willing to pay in the market, the more appealing the idea will be, and the more likely it is that the firm will issue securities to raise capital for the investment e. Stability Improves Welfare • Related to core principle 2- risk requires compensation • Business cycle fluctuations is an instability that individuals cannot get rid of themselves...
View Full Document
This note was uploaded on 05/10/2010 for the course ECO 3223 taught by Professor Staff during the Spring '08 term at University of Central Florida.
- Spring '08