Financial institutions in the U. S. economy Suppose Edison would like to invest $4,000 of his savings. One way of investing is to purchase stock or bonds from a private company. Suppose TouchTech, a hand-held computing firm, is selling stocks to raise money for a new lab-a practice known as finance. Buying a share of TouchTech stock would give Edison the firm. In the event that TouchTech runs into financial difficulty, will be paid first. Suppose Edison decides to buy 100 shares of TouchTech stock. Which of the following statements are correct? 1. The Dow Jones Industrial Average is an example of a stock exchange where he can purchase TouchTech stock.
2. An increase in the perceived profitability of TouchTech will likely cause the value of Edison's shares to rise.
3. TouchTech earns revenue when Edison purchases 100 shares, even if he purchases them from an existing shareholder.
Alternatively, Edison could invest by purchasing bonds issued by the government of Japan.
Assuming that everything else is equal, a bond issued by a government that is engaged in a civil war most likely pays a interest rate than a bond issued by the government of Japan