1.1 Why Study Financial Markets?
1) Financial markets promote economic efficiency by
A) channeling funds from investors to savers.
B) creating inflation.
C) channeling funds from savers to investors.
D) reducing investment.
Ques Status: Previous
Problem set 1 Solution
1. Because money was losing value at a slower rate (the inflation rate was lower) in the
1950s than in the 1970s, it was a better store of value then, and you would have been
willing to hold more of it.
2. Even if he or she is a non
Money and Banking: Homework 3
Due on Wednesday, 3/22/2017.
1. Compute the price of a share of stock that pays a $1 per year dividend and that you
expect to be able to sell in one year for $20, assuming you require a 15% return.
2. After careful analysis,