Question 1. Discuss the four main factors that determine rates of return in a market economy.
Question 2. Briefly list the problems associated with profit maximization as the chief goal of corporate managers.
Question 3. Suppose that the exchange rate is $0.2970 to the Israeli shekel. How could you make arbitrage profits with $10,000 if the dollar price of gold is $200 per ounce and the shekel price is 750 ILS per ounce?
Question 4. Does growth per se add value to the current price of a share? If not what does add value to a share's current price?
Question 5. Describe the main features of forward contracts. How do forward contracts differ from futures contracts?
Question 6. Explain why the market price of a company's stock does not necessarily equal its book value.