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e Q Search this course Homework (Ch 13) X Back to Assignment Attempts 1:[:': Keep the Highest / 3 1. Financial institutions in the U.S.

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e Q Search this course Homework (Ch 13) X Back to Assignment Attempts 1:[:': Keep the Highest / 3 1. Financial institutions in the U.S. economy Suppose Derrick decides to use $10,000 currently held as savings to make a financial investment. One method of making a financial investment is the purchase of stock or bonds from a private company. Suppose Warm Breeze, a cloud computing firm, is sellin g bonds to raise money for a new lab. This practice is called bond issued by Warm Breeze would give Derrick W finance. Buying a W _the firm. In the event that Warm Breeze runs into financial ' o et difficulty, will be paid first. _ - Suppose instead Derrick chooses to buy 250 shares of Warm Breeze stock. Which of the following statements are correct? Check all that apply. Expectations of a recession that will reduce economywide corporate profits will likely cause the value of Derrick's shares to decline. An increase in the perceived profitability of Warm Breeze will likely cause the value of Derrick's shares to rise. Warm Breeze earns revenue when Derrick purchases 250 shares, even if he purchases them from an existing shareholder. Alternatively, Derrick could undertake their financial investment by purchasing bonds issued by the U.S. government. Assuming that everything else is equal, a corporate bond issued by an electronics manufacturer most likely pays a municipal bond issued by a state. W interest rate than a

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