2. An article in the New York Times in mid-2012 noted, "with the economy still struggling and new regulations meant to eliminate bad lending, bank loans continue to lag" (a) (b) (c) What does the article mean by "bad lending"? Which types of firms might find it harder to receive loans if banks reduce "bad lending"? Briefly explain. What alternatives do the firms you identified in part (b) have for obtaining credit if they are unable to get bank loans? Source: Ian Mount, "When Banks Won't Lend, There Are Alternatives, Though Often Expensive," New York Times, August 1, 2012.

2. An article in the New York Times in mid-2012 noted, "with the economy still struggling and new regulations meant to eliminate bad lending, bank loans continue to lag" (a) (b) (c) What does the article mean by "bad lending"? Which types of firms might find it harder to receive loans if banks reduce "bad lending"? Briefly explain. What alternatives do the firms you identified in part (b) have for obtaining credit if they are unable to get bank loans? Source: Ian Mount, "When Banks Won't Lend, There Are Alternatives, Though Often Expensive," New York Times, August 1, 2012.

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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Answer question 42
3. According to an article on the junk bond market in Europe published in the Economist in 2016, "The spread (the interest premium over government borrowing rates) paid by junk-bond issuers has risen by nearly three-and-a-half percentage points since March last year." (a) How can you tell whether a newly issued bond is a junk bond? (b) Why would the spread between government bonds and junk bonds have been rising? (c) Does this increase in the spread make junk bonds a better or a worse investment compared with buying government-issued bonds? Briefly explain.
20. The discount rate is defined as follows: a) the interest rate commercial banks charge each other for lending funds. b) the interest rate commercial banks charge their new customers. c) the interest rate that the Fed charges commercial banks for lending funds d) none of the above
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9.
Briefly describe and explain the following investments terms a) savings c) Mutual funds e) Securities
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