Homework Assignment 3
8. Predict what will happen to interest rates on a corporations bonds if the federal government guarantees today that
it will pay creditors if the corporation goes bankrupt in the future. What will
Homework Assignment 2
1. Explain why you would be more or less willing to buy a share of Microsoft stock in the
a. Your wealth falls.
Less willing to buy, because wealth falls, I do not have more mo
1. Define the following acronyms:
(a) ROA return on assets:
percentage shows how profitable a company's assets are in generating revenue.
(b) ROE Return on equity:
the rate of return on the ownership interest (shareholders' equity) of the common stock own
Homework Assignment 4
6. Wealthy people often worry that others will seek to marry them only for their money. Is this a
problem of adverse selection?
Yes, this is a problem of an adverse selection problem. Because a ric