Railroad companies controlled by J. P. Morgan sometimes issued watered stock, a practice that Question 11 options: a) kept investors happy but caused overcapitalization and debt for the railroads. b) was highly speculative and forced the railroads into bankruptcy. c) offered large investors first refusal when a company issued additional stock. d) kept the railroad companies from bankruptcy.

A) kept investors happy but caused overcapitalization and debt for the railroads.

Explanation:

When a firm issued watered stock, it means that they are issuing the stock with an artificially high par value. Watered stocks were a type of fraud related to the sales of stocks with an absurd par value. You have to remember that back then, railroad companies were huge and extremely powerful, monopolies were common and information was scarce and generally manipulated. By issuing stocks with a very high par value investors were tricked into believing that the company was actually worth much more that its real value. Very few people dared to oppose the industry giants and most tried to earn money by using the same dirty tricks.

hi,

henry is an economist and wants to understand the relationship between inflation and consumer spending habits. for his research, he needs the consumer price index for 2014 and the inflation rate. based on the prices of goods given, what will he find to be the cpi and inflation rate for 2014? assume that a consumer’s basket for three consecutive years consists of the following:

you dont privide answer choices.

answer - 15% of a inflatation rate is 15% less in cpi