Cyberproblem 35

Edmund Enterprises recently made a large investment to upgrade its technology. While these improvements wont have much of an impact on performance in the short run, they are expected to reduce future costs significantly. What impact will this investment have on Edmund Enterprises earnings per share this year? What impact might this investment have on the companys intrinsic value and stock price? Describe the different ways in which capital can be transferred from suppliers of capital to those who are demanding capital. What are financial intermediaries, and what economic functions do they perform? Suppose the population of Area Y is relatively young while that of Area O is relatively old, but everything else about the two areas is equal. a. Would interest rates likely be the same or different in the two areas? Explain. b. Would a trend toward nationwide branching by banks and savings and loans, and the development of nationwide diversified financial corporations affect your answer to part a? Suppose a new and much more liberal Congress and administration were elected, and their first order of business was to take away the independence of the Federal Reserve System and to force the Fed to greatly expand the money supply. What effect would this have on the level of interest rates immediately after the announcement? Is an initial public offering an example of a primary or a secondary market transaction? Differentiate between dealer markets and stock markets that have a physical location. Identify and briefly compare the two leading stock exchanges in the United States today.

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