Hi, I have 2 questions… Book 2 page 139-140. I don’t understand Question No.3 and Question No. 6 I am just confused overall, so if anybody can explain a little bit about all four choices in question 3, and why country Venvakian’s gov policy don’t enhance growth… …that will be great!! Thank you very much!!! Geez, i am so behind, getting really stressed. Anybody else still on book two? I also skipped ethics in book 1 as well…ahh!!
If you want help, you should type out the question and answer(s)
I agree Book #2 is across the room and I am to tired to get it.
This was asked in another thread. search for it. as for #6 - the answer is no you won’t invest as the risks of investing outweight the benefits. The gov’t gets too involved with controlling stakes and as a foreign investor you are at their mercy. B is incorrect only becuase high growht matters if you can participate in the upside gains. The high gov’t involvement means that you as a foreign investor may not see the upside gains. C is incorrect as the political system is not stable. (high tarrifs, gov’t with equity positions etc.) D is wrong because growth is predicted to be higher than average. as for #3 i think schweser explains it well. If inflation rises individual investor expenses rise while the value of their assets will decrease. Defined benefit plans don’t care as the investor bears the risk (so A is not the answer). Endowments may be at risk of their real return falling in a year but they can decrease their spending to compensate (B is not the answer). D is not the answer as insurers projected future liability will fall with a rise in rates.
Thank you Striker! And, yes next time I will type out my quetion. Thank you all 