Exam 4: Determining Interest Rates

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An investor who desires the ability to have quick and easy access to cash would prefer to hold which type of asset?

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As a person's wealth increases,which of the following portfolio holdings is likely to increase the least?

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

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Which is the best example of idiosyncratic risk?

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The bond supply curve

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In late 2008 and early 2009,many feared that the economy may experience deflation.Make use of a graph of the bond market to show how this affected interest rates.

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An investor who bases the decision to buy an asset solely on the expected return of an asset is considered to be

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Which of the following is NOT a reason that interest rates remained low despite high budget deficits following the financial crisis?

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The expected change in the supply and demand for bonds due to an increase in expected inflation will definitely result in

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Suppose that a small economy that had previously been closed becomes open.If its real interest rate had previously been below the world real interest rate,we would expect that

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If the Fed increases the money supply and as a result,households and firms buy more short-term financial assets,the prices of those short-term financial assets will ________ and the interest rates on those assets will ________.

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An open economy is one that

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In a large open economy

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If a large open economy,like the United States,reduces its budget deficit,what impact would this have on a small open economy?

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What impact do savings rates in Belgium have on the real interest rate that businesses in Belgium must pay to obtain the funds to finance their spending on plant and equipment?

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Interest rates typically fall during recessions,suggesting that

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A one-year discount bond with a face value of $1,000 that is currently selling for $900 has an interest rate of

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Since all assets typically do NOT move together,how can investors typically reduce risk?

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In the market for loanable funds,the seller is considered to be

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If there is an excess supply of bonds at a given price of bonds,then

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