Exam 4: Determining Interest Rates

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The demand curve for bonds would be reduced by

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How should a financial plan of an older saver differ from that of a younger saver?

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Investors value liquidity in an asset because

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If a government's income tax receipts exceed its expenditures,the government is running a

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Suppose you are risk loving and you are deciding between two investments.One has a guaranteed return of 5% while the second has a 50% chance of a 10% return and a 50% chance of a 0% return.Which investment would you choose? Why?

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Which of the following will cause the money demand curve to shift to the left?

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The supply curve for bonds would be shifted to the right by

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In the bond market,the buyer is considered to be

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In November 2012,HP claimed that they had weak earnings due to questionable accounting by a company that they had taken over.This is an example of

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How can diversification reduce idiosyncratic risk but not systematic risk?

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Which of the following can best be characterized as a "Black Swan" event?

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In 2012,many investors feared that Greece may default on its bonds.Make use of a graph of the bond market to show how this affected interest rates on Greek bonds.

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During a period of economic expansion,when expected profitability is high

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During 2000,the government repurchased $30 billion in U.S.Treasury bonds outstanding.This was the first time this had been done since the administration of Herbert Hoover in the early 1930s.Analyze the impact of this repurchase on the bond market.

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A one-year discount bond with a face value of $1,000 has an interest rate of 4%.What is its price?

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A decrease in expected inflation

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When nominal interest rates fall on financial assets such as U.S.Treasury bills,the amount of interest that households and firms

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An increase in expected inflation will

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Suppose that businesses in Japan reduce their spending on plant and equipment.What will be the effect on spending on plant and equipment by businesses in the United States?

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Consider an open economy that is a net borrower (like the United States).What would be the impact of a shift to a closed economy?

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