MATH 246 Quiz: Quiz 2 Solutions Spring 2011
14 Mar 2019
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A debt contract gives the lender a right to the repayment of a xed principal and interest income. An equity contract gives the investor an ownership stake in the rm. She has a right to the share of pro ts/dividends of the rm and has a say in major decisions of the. Banks get into trouble through solvency crisis and liquidity crisis. 3 pts each for a total of 9 pts: the development of nancial markets during victorian times helped spur the west- ward expansion of the united states by nancing the rapid expansion of railroads. ". The rapid expansion of the railroad system required large amounts of initial capital. This capital was obtained mainly in nancial markets. This process was helped substantially by the development of nancial markets during the victorian era: write the equation of the return for a risky asset according to the capm.
