Suppose Gilberto would like to use $1,000 of his savings to make a financial investment.

One way of making a financial investment is to purchase stock or bonds from a private company.

Suppose TouchTech, a hand-held computing firm, is selling stocks to raise money for a new laba practice known as _______(Equity or Debt)finance. Buying a share of TouchTech stock would give Gilberto______________(An IOU, promise to pay, from or a claim partial ownership in)the firm. In the event that TouchTech runs into financial difficulty, ______________________(Gilberto and the other stockholders or the bondholders)will be paid first.

Suppose Gilberto decides to buy 100 shares of TouchTech stock.

Which of the following statements are correct?Check all that apply.

_____ An increase in the perceived profitability of TouchTech will likely cause the value of Gilberto's shares to rise.

_____The Dow Jones Industrial Average is an example of a stock exchange where he can purchase TouchTech stock.

_____The price of his shares will rise if TouchTech issues additional shares of stock.

Alternatively, Gilberto could make a financial investment by purchasing bonds issued by the government of Japan.

Assuming that everything else is equal, a bond issued by a government that is engaged in a civil war most likely pays a __________(higher or Lower)interest rate than a bond issued by the government of Japan.