Ask Question
BusinessBusiness
30 July, 06:30

7) When stock prices fall:

A) an individual's wealth is not affected nor is her willingness to spend.

B) a business firm will be more likely to sell stock to finance investment spending.

C) an individual's wealth may decrease but her willingness to spend is not affected.

D) an individual's wealth may decrease and her willingness to spend may decrease.

+1
Answers (1)
  1. 30 July, 08:39
    0
    The correct answer is letter "D": an individual's wealth may decrease and her willingness to spend may decrease.

    Explanation:

    In case a trader is in a long stock position and the stock price falls, the investor will be losing money. His or her buying power is reduced as well as long as the stock price keeps falling. The trader has two options: whether to sell the stock to cover the loss immediately or to wait to find out if there is a recovery movement in the stock that at least could allow the investor to cover the trade breaking even.
Know the Answer?
Not Sure About the Answer?
Find an answer to your question ✅ “7) When stock prices fall: A) an individual's wealth is not affected nor is her willingness to spend. B) a business firm will be more ...” in 📘 Business if you're in doubt about the correctness of the answers or there's no answer, then try to use the smart search and find answers to the similar questions.
Search for Other Answers
You Might be Interested in
Which of the following is a mutually exclusive cost pool used in activity-based cost accounting? a. All of the answers are correct b. unit level c. Product level d. Batch level
Answers (1)
The firm forecasts that it could sell a maximum of 4,000 A-100s this week and a maximum of 1,000 B-200s. Profits for the A-100 are $1.00 each, and profits for the B-200 are $4.00 each. What is the objective function? a. $1.00A + $4.00B = Z b. $1.
Answers (1)
Young Corp. purchased equipment by making a down payment of $4,000 and issuing a note payable for $18,000. A payment of $6,000 is to be made at the end of each year for three years. The applicable rate of interest is 8%.
Answers (1)
Which of the following would be considered an asset on a bank's balance sheet? a. Demand deposits b. Savings accounts c. Loans from other banks d. A consumer loan
Answers (2)
An employer establishes a physical exercise area in the workplace and encourages all employees to use it. This is an example of which level of health promotion
Answers (1)
New Questions in Business
Jesse is thinking about buying an entertainment system that will cost $1,800. The store will finance the purchase for 12 months at 20 percent interest. His payments will be $166.74. How much will he pay in interest over the life of the loan?
Answers (1)
Which strategy for merging two distinct cultures is most appropriate when the two merging companies are in unrelated industries or operate in different countries because the most appropriate cultural values tend to differ by industry and national
Answers (1)
What is the safest way to dispose of old bank account statements?
Answers (1)
Whats the difference between financial planning and financial goals
Answers (1)
The Brights are buying a home from the Stones. They are splitting the escrow service fees 50-50. Do they live in Northern or Southern California?
Answers (1)
Home » Business » 7) When stock prices fall: A) an individual's wealth is not affected nor is her willingness to spend. B) a business firm will be more likely to sell stock to finance investment spending.
Sign Up Forgot Password?