Answer:
1. How is a bond like an IOU?
A bond is an IOU because it is actually a type of IOU. A bond is in essence a security in which the bond issuer promises to pay the bondholder the full value of the bond at maturity, plus interest payments (coupons) that can be paid either periodically, or at maturity as well.
2. Why is an investment grade bond is considered a “safe” investment?
Investment grade bonds are those bonds that have a rating that is considered "safe". This rating is provided by agencies such as Standard and Poors or Moody's. It is the credibility behind these agencies that makes a bond with that type of rating a safe investment.
3. How can an investor make money by buying a bond?
The investor makes money because he or she obtains the full value of the bond at maturity plus interest (coupon payments).
Bondholders also have priority over stockholders in case of bankruptcy, so a bond is in many cases a safer investment than a stock.
4. Would you recommend your Stock Market Game team include a bond in your portfolio? Why, why not?
Yes, bonds should be included because they are one of the two main types of securities, the other being stocks precisely. Companies often have to take the decision to finance their operations either with bonds or stocks, or a combination of the two, so if the game includes bonds, it also becomes more realistic.
Answer:
The answer to this solution is explained in the explanation section below
Explanation:
Solution
Given that:
- The Current Account will decrease or reduce by 120000, net foreign assets decrease.
- Nothing changes, he stocks were earlier with an American company too.
- The Current account increases, there will be no change in net foreign assets (since the check was drawn on a US bank, it means the Spanish person had already had the money in US only).
- Nothing changes, the wine was bought, from Italy, already by the restaurant.
- The Current account decreases by 3500, foreign assets decrease by the same amount.
- The Current account increases, there is no change in assets since the money was already transferred.
Note: kindly find the complete question to this solution attached below
This type of lease is known as net lease.
The term net lease refers to a contractual agreement where a lessee pays a portion or all of the taxes, insurance fees, and maintenance costs for a property in addition to rent. Net leases are commonly used in commercial real estate.
In the purest form of a net lease, the tenant is expected to pay for all the costs related to a piece of property as if the tenant were the actual owner. A net lease is the opposite of a gross lease, where the tenant pays a flat rental fee while the landlord is responsible for the other costs.
To learn more about net lease here
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Answer:
1 and 2: Find attached of the graph
3. The correct answers are:
(a) Price level will fall.
b)The demand for money will fall
Explanation:
(1) A fall in money supply will shift the money supply curve leftward, increasing interest rate and quantity of money. See the first attachment for the graph.
(2) Lower money supply will decrease aggregate demand, shifting AD curve leftward, decreasing both price level and output. See the second attachment for the graph.
(3) The following will happen during transition:
- --(a) Price level will fall.
-- b)The demand for money will fall
