Which of the Following Actions Might We Logically Expect to Result

question 236

Multiple Choice

Which of the following actions might we logically expect to result from rising stock prices?

• A)Jim increases his consumption spending.
• B)Firms sell fewer shares of new stock.
• C)Firms spend less on investment.
• D)None of the above is correct.

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Definitions:

Investment Objectives

Define the financial goals and strategies of an investor or an investment fund.

Risk

The potential for loss or unfavorable outcomes in any given situation, often assessed in finance as the variability of returns on investments.

Return

Return refers to the gain or loss on an investment over a specific period, including income received and the change in value, usually expressed as a percentage of the investment’s initial cost.

Investment Horizon

Time horizon for purposes of investment decisions.