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Part I.

How does the return to stocks compare with other assets?

Total Returns of Stocks, Bonds, and Treasury Bills:

1950 to 2005

(In Percent)

 

Stocks

 

 

 

Return Based on the

Treasury Bills

Bonds

Period

Standard & Poor's 500

 

(10-Year)

 

Index

Total Return

  Total Return

 

Total Return

  
    

1950 to 1959

 

 

 

1960 to 1969

 

 

 

1970 to 1979

 

 

 

1980 to 1989

 

 

 

1990 to 1999

 

 

 

2000 to 2004

 

 

 

2005

 

 

 

2006

 

 

 

2007

 

 

 

    

#Inflation-adjusted returns.

   

Source: Table No. 1160, The Statistical Abstract of the United States , 2009, As taken from

             Global Financial Data, Los Angeles , CA., "GFD Guide to Total Returns."

 

             http://www.census.gov/compendia/statab/tables/09s1160.xls

 


Part II.

After the collapse of Enron Corporation and other major scandals that involved large companies, such as WorldCom, Tyco and Global Crossing, the investor public was left shaken. The government responded by passing the Corporate Responsibility Act of 2002, also known as the Sarbanes-Oxley Act.

What are some of the key provisions of this act?

Sources: http://www.rbzaneadvisors.com/pdf/KeyProvisionSarbanes-Oxley.pdf

http://www.microsoft.com/dynamics/nav/product/navision_15_major_sox_provisions.mspx

Part III.

Some commentators consider the Sarbanes-Oxley act a success, and others feel that, because of make-up of the financial system, an Enron can occur again.

Can the Sarbanes-Oxley act prevent another Enron?

Sources: http://www.economist.com/business/displayStory.cfm?story_id=3984019

http://rs.hudson.org/index.cfm?fuseaction=publication_details&id=3844&pubTupe=Rs_)

http://seattletimes.nwsource.com/html/businesstechnology/2002800032_corpfraud12.html







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