All of the following take place in the direct finance market except
A) ownership in corporations is sold in the form of common stock.
B) ownership in corporations is sold in the form of preferred stock.
C) corporate bonds are sold to savers.
D) deposits from savers are accumulated and loans made to borrowers.
Question 2
Compared to a situation in which there is no change in the value of the dollar relative to the peso, in which of the following situations would you be worse off?
A) you borrow 10,000, you earn income in pesos, the dollar appreciates against the peso, you must pay back the loan in dollars
B) you borrow 10,000, you earn income in pesos, the dollar depreciates against the peso, you must pay back the loan in dollars
C) you borrow 10,000 pesos, you earn income in dollars, the dollar appreciates against the peso, you must pay back the loan in pesos
D) you borrow 10,000 pesos, you earn income in pesos, the dollar depreciates against the peso, you must pay back the loan in pesos
These examples of stimuli were used in the experiment by Vinckier et al. (2007). Mouton is the Frenc
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