True or False:
1. The values of securities change with the expectations of benefits and costs.
2. For a firm to raise additional capital through selling new shares of stock is more common when stock prices are high than
when they are low.
3. If you and a large group of others have all received a “hot” stock tip, it is unlikely to be a source of unusually high profits.
4. Historically, the U.S. stock market has outperformed other financial assets.
5. A firm’s price-earnings ratio is its stock price divided by its annual dividend.
6. The demand for loanable funds varies inversely with the real interest rate, other things equal.
7. If businesses expect higher rates of return on their investments, it would shift the loanable funds demand curve to the right.
8. An increase in business taxes would shift the loanable funds demand curve to the left.