Bubble, Bubble, Toil and Trouble (25 points):Let's take a look at assets and their discontents. Be sure to be very detailed and through with your answers.

1. (5 points) What is a stock? What is a bond? How do they differ?

2. (5 points) What is a bubble? Give an example of a bubble within your own lifetime and explain why it was a bubble.

3. (10 points) What are the three features of markets that may give rise to bubbles? Explain in detail and give an example alongside each feature.

4. (5 points) What is the difference between stationaryand dynamicrents? Explain and give an example of each.