Explain the Difference Between a Shift of the Investment Demand

question 80

Essay

Explain the difference between a shift of the investment demand curve and a movement along the investment demand curve. Give one example of what causes a movement along the investment demand curve and one example of what shifts the curve itself.

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Definitions:

Debt/Equity Ratio

The ratio that highlights the proportional use of debt and shareholders' equity in asset financing for a company.

Stripped Common Shares

Common stock on which dividends and capital gains are repackaged and sold separately.

Dividends

Payments made by a corporation to its shareholders, usually derived from the company's profits, as a reward for investing in the company's equity.

Capital Gains

Capital Gains are the profits realized from the sale of assets such as stocks, bonds, or real estate, which exceed the purchase costs.