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1 Giving a brief explanation, determine the likely effect of each o

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1. Giving a brief explanation, determine the likely effect of
each of the following on the value of GM stock.(Consider
each event independent of the others.)
a. The Federal Reserve lowers both the \"discount\" rate
and the Federal Fund rate.
b. The rising unemployment rate signals a slow-down in
the economy.
c. The value of the US dollar has significantly gone up
against most currencies, making American products more
expensive to foreigners while making imports cost less to
American consumers.
d. The United States signs a free trade agreement with
European Union.
e. Ford Company reaches an agreement with the auto
workers union.
f. It has been reported that there are signs that the
European recessions is coming to an end.
Solution
1. fed fund rate and discount arte will impact int .rate in
mid to short term . so potenial buyer of ford cars (who
wants to take auto loans may postpone buysing ford cars if
that becomes costlier) stock value may see fall in coming
quarters.
2. rising unemployemnt rate may not effct company that
much new sales will come from people who are earning .

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1. Giving a brief explanation, determine the likely effect of each of the following on the value of GM stock.(Consider each event independent of the others.) a. The Federal Reserve lowers both the \"discount\" rate and the Federal Fund rate. b. The rising unemployment rate signals a slow -down in the economy. c. The value of the US dollar has significantly gone up against most currencies, making American products more expensive to foreigners while making imports cost less to American consumers. d. The United States signs a free trade agreement with European Union. e. Ford Company reaches an ag ...
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