The relationship between nominal returns. real returns. and inflation is referred to as the:


7. The relationship between nominal returns, real returns, and inflation is referred to as the: A. call premium. B. Fisher effect. C. conversion ratio. D. spread E. current yield 8. The capital gains yield equals which one of the following? A. Total yield B. Required rate of return C. Market rate of return D. Dividend yield E. Dividend growth rate 9. Jill owns 100 shares of stock. Each share entitles her to one vote per open seat on the board of directors. Assume there are three open seats in the current election and Jill casts all 300 of her votes for a single candidate. What is the term used to describe this type of voting? A. Proxy B. Aggregate C. Cumulative D. Straight E. Condensed 10. Nate could not attend the last shareholders meeting and thus he granted the authority to vote on his behalf to the managers of the firm. Which term applies to this granting of authority? A. Straight B. Cumulative C. Consent-form D. Proxy E. In absent Help with all questions. Can you also show work please?!

Answer

Ans. 7 – Fisher Effect The Fisher effect is an economic theory proposed by economist Irving Fisher that describes the relationship between inflation and both real and nominal interest rates. The Fisher effect states that the real interest rate equals to the nominal interest rate minus the expected inflation rate. Therefore, real interest rates fall as inflation increases, unless nominal rates increase at the same rate as inflation. The Fisher effect is an economic theory proposed by economist Irving Fisher that describes the relationship between inflation and both real and nominal interest rates. The Fisher effect states that the real interest rate equals to the nominal interest rate minus the expected inflation rate. Therefore, real interest rates fall as inflation increases, unless nominal rates increase at the same rate as inflation. Ans 8 – Total Yield CGY is unpredictable and may occur monthly, quarterly or annually. This format differs from dividends that are set by the company and paid out to shareholders at a predefined period.A capital gains yield cannot be generated if the share price falls below the original purchase price. Some stocks pay high dividends and may produce lower capital gains. This occurs because every dollar that is paid out as a dividend is a dollar that the company cannot reinvest back into the company.Other stocks pay lower dividends but may produce higher capital gains. These stocks are considered growth stocks because profits are redirected back into the company growth and not distributed to shareholders, while other stocks pay poor dividends and produce a low or no capital gains.Many investors choose to calculate the CGY of a security because the formula usually provides an indication of how much the price fluctuates. This helps an investor decide which securities are good investment choices. Capital gains may result in paying capital gains taxes. However, the taxes can be offset by losses or carried over into the following year. Ans 9 – Cumulative Cumulative voting is the procedure of voting for a company’s directors; each shareholder is entitled one vote per share multiplied by the number of directors to be elected. This is sometimes known as proportional voting. This is advantageous for individual investors, because they can apply all of their votes toward one candidate. Ans 10 – Proxy

Rather than physically attending the shareholder meeting, most investors vote by proxy. Each shareholder designates someone else, such as a member of the company’s management team, to vote in line with the shareholder’s directions as written on the proxy card. The proxy statement may request that shareholders approve the auditor report, chief executive officer pay, the election of directors, or more complex issues such as stock option plans, mergers and acquisitions, or other resolutions.Proxy votes may be cast by mail, phone or internet before the cutoff time, typically 24 hours before the shareholder meeting. Responses may include “For,” “Against,” “Abstain” or “Not Voted,” and may be changed before the deadline.

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