As a Medium of Exchange,money

question 37

Multiple Choice

As a medium of exchange,money:

• A)makes it harder to trade.
• B)creates a complicated service structure.
• C)reduces the need for bartering.
• D)is indivisible.
• E)can easily be counterfeited.

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Definitions:

Buying and Selling

The basic act of trading or exchanging goods, services, or financial instruments, such as stocks or currencies.

Bird-In-The-Hand Theory

Assumes that investors value a dollar of dividends more highly than a dollar of expected capital gains because the dividend yield component, D1/P0, is less risky than the g component in the total expected return equation rs = D1/P0 + g.

Dividend Yield

A financial benchmark that illustrates the relation between a company's per annum dividend issuance and its share price.

Required Return

The expectancy of financial gain on an investment, considering its risk profile, set by investors as a benchmark.