Declines in stock prices are sometimes viewed as harbingers of future declines in real GDP. Why do you suppose that might be true? 2. When the Russian government defaulted on its debt to foreigners in 1998, interest rates rose on bonds issued by many other developing countries. Why do you suppose this happened? 3. Many workers hold large amounts of stock issued by the firms at which they work. Why do you suppose companies encourage this behavior? Why might a person not want to hold stock in the company where he works? 4. Why is it important for people who own stocks and bonds to diversify their holdings? What type of financial institution makes diversification easier?