4 - Banking Homework: Unit 4 :Conceptual Problems .Explain...

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Banking Homework: Unit 4 Conceptual Problems : Explain why being a residual claimant makes stock ownership risky . Since stock holders are the final people to get paid and these payments are directly tied to the profits of the firm, stockholding is risky. In bad times, even when bond holder gets paid, there is a chance that most or all of the firm’s profits are taken by the obligations of the firm leaving the stock holders with no dividends. At the same time, in good years, bond holders still get paid the same, but any excess get passed to stockholders. This makes the returns to stock holding volatile and thus risky . Check the business section of a recent newspaper (or a financial website) to find the current level of each of the following indices, along with its change over the last 12 months : Dow Jones Industrial Average Nasdaq Composite Wilshire 5000 Comment on what you have found, including the differences among the indices . Unable to respond to this question because of lack of resources found on local
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4 - Banking Homework: Unit 4 :Conceptual Problems .Explain...

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