Fill in the blanks
Suppose Karim decides to use $4,000 currently held as savings to make a financial investment. One method of making a financial investment is the purchase of stock or bonds from a private company. Suppose Arcadia, a biomedical research firm, is selling stocks to raise money for a new lab. This practice is called (BLANK) finance. Buying a share of Arcadia stock would give Karim (BLANK) the firm. In the event that Arcadia runs into financial difficulty, (BLANK) will be paid first.
Suppose Karim chooses to buy 250 shares of Arcadia stock.
Which of the following statements are correct? Check all that apply.
-The Dow Jones Industrial Average is an example of a stock exchange where he can purchase Arcadia stock.
-Expectations of a recession that will reduce economywide corporate profits will likely cause the value of Karim's shares to decline.
-An increase in the perceived profitability of Arcadia will likely cause the value of Karim's shares to rise
Fill in the blanks: Alternatively, Karim could undertake their financial investment by purchasing bonds issued by the U.S. government.
Assuming that everything else is equal, a U.S. government bond that matures 30 years from now most likely pays a (BLANK) interest rate than a U.S. government bond that matures 10 years from now.