FINANCIAL MARKET AND INSTITUTION 9th edition Frederic S. Mishkin, Stanley G. Eakins - THE STOCK MARKET

1. Why would economic growth affect the value of a stock?

2. Why do people invest in stocks? Is stock a riskier investment than bonds? Why or why not? How is preferred stock similar to bonds? To common stock?

3. What are the limitations of the generalized dividend model?

4. What are the risks faced by investors investing in stocks in emerging markets?

5. To capture investor interests, Exchange Traded Funds (ETF) have become the latest market innovation. Since 1990, they have been actively traded in a form of basket of securities. What are the main features of ETF? Do they have some disadvantages?

6. What is the motivation for buying foreign stocks?