The treasury stock method is used to determine the impact of dilutive warrants and options on earnings per share. It assumes that the hypothetical funds received by the company from the exercise of the options are used to purchase shares (not sell shares) of the company's common stock in the market at the average market price.

University endowments are established with the intent of having perpetual lives.

The value of a call is directly related to the underlying common stock. As the price of the stock goes up the call gains value and as the stock declines the call loses value. The call owner benefits when the price of the stock rises.

The other 2 crucial ingredients are independence and credibility.

Since the government must finance the budget deficit with debt, this increases the demand for loanable funds, and hence increases real interest rates. Deficit spending also causes inflation, since the shift in aggregate demand results in a higher equilibrium price level. This would also increase nominal interest rates.