Compared to Bonds, Common Stocks

question 52

Multiple Choice

Compared to bonds, common stocks

• A) are easier to analyze.
• B) have a fixed life.
• C) have a more uncertain value.
• D) have a maximum payment to owners.

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Definitions:

Equilibrium

A condition in markets where supply equals demand, and there is no external pressure for change.

Shortage

The insufficiency of a good or service that occurs when the quantity demanded exceeds the quantity supplied; shortages occur when the price is below the equilibrium price.

Price Elasticity of Demand

The rate at which demand for a product responds to its price being altered.

Short Run

The period in economic theory during which at least one factor of production is considered fixed.