Question
1. Suppose a firm's stock price has increased dramatically with no changes to the underlying fundamental characteristics of the firm. Which of the following external
1.
Suppose a firm's stock price has increased dramatically with no changes to the underlying fundamental characteristics of the firm. Which of the following external factors would best explain this phenomenon?
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fear by stock market participants
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an economy wide recession
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greed by stock market participants
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steep increases in interest rates
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2.
Which of the following best describes the economic conditions typically prevalent during phase III (expansion) of the business cycle?
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eventually falling inflation, eventually falling interest rates, falling unemployment, eventually falling bond market, eventually the peak in the stock market, expanding economy
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eventually rising inflation, eventually rising interest rates, rising unemployment, eventually rising bond market, eventually the trough in the stock market, expanding economy
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eventually falling inflation, eventually rising interest rates, falling unemployment, eventually falling bond market, eventually the peak in the stock market, contracting economy
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eventually rising inflation, eventually rising interest rates, falling unemployment, eventually falling bond market, eventually the peak in the stock market, expanding economy
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