FEEDBACK TO EACH QUESTION PLEASE

1.Let me ask you some additional questions which may require you to dive back into the text material. You stated that " Both markets are efficient since they are both profiting in their own way." Please expand more on this statement. Would you say markets are more efficient in a good economy? FYI: Our reading this week also covers forms of businesses so let me discuss this topic. Many corporations have their corporate charter in the state of Delaware. The reason for this is that Delaware has very favorable laws in terms of tax treatment for corporations. On aside note, many Corporations have their credit card division formed in Delaware even if their main corporate charter is not in Delaware. The reason for this is that Delaware does not have an interest rate cap on how much companies can charge.

2.Many factors influence the stock market. A big factor in the stock market is who the unemployment rate and job growth. Usually when jobs are strong then the stock market tends to go up. However recently the Dow hit an all time high; however the jobs market is still just fair and jobs has not completed recovered yet in terms of all the job losses from 2008 to 2011. Thus it is a little abnormal now for the stock market to be performing this well.

3.You stated that "Your bond portfolio could suffer market price losses in a rising rate environment. Bond market volatility could affect the prices of individual bonds"Please expand more on this statement.

You stated "A disadvantage of bonds over stock is that purchase of bonds does not give you any ownership in the corporation but is purchasing a debt piece of the company whereas purchase of stocks gives you a part of ownership in a corporation and being an owner brings with it a lot of privileges like voting rights on issues affecting the company's future." Please expand more on this statement. Have you had any experience with bonds? FYI: When a company goes is about to go bankrupt; the company must make every attempt to pay back their bondholders. However there are no obligations to stockholders.

4.Let me ask you some additional questions which may require you to dive back into the text or perhaps even outside of the text material. You stated that "Bonds are subject to risks such as the interest rate risk, prepayment risk, credit risk, reinvestment risk, and liquidity risk" Please expand more on this statement.

What is does coupon rate on a bond mean? FYI: Of all the bonds, Corporate bonds have the highest interest rate. Especially your riskier corporate bonds - sometimes referred to as Junk Bonds.