Which of the following statement is false? O a. When interest rates decrease, the demand curve for bonds shifts to the left. O b. When an economy grows out of a recession, normally the demand for bonds increases and the supply of bonds increases. OC. When income and wealth are rising, the demand for bonds rises and the demand curve shifts to the right. O d. The more liquid an asset is relative to alternative assets, holding everything else unchanged, the more desirable it is, and the greater the quantity demanded. An increase in an asser's expected return relative to that of an alternative asset, holding everything else unchanged, raises the quantity demanded of the asset.

Which of the following statement is false? O a. When interest rates decrease, the demand curve for bonds shifts to the left. O b. When an economy grows out of a recession, normally the demand for bonds increases and the supply of bonds increases. OC. When income and wealth are rising, the demand for bonds rises and the demand curve shifts to the right. O d. The more liquid an asset is relative to alternative assets, holding everything else unchanged, the more desirable it is, and the greater the quantity demanded. An increase in an asser's expected return relative to that of an alternative asset, holding everything else unchanged, raises the quantity demanded of the asset.

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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When Vladimir sells bonds and gets money, his liquidity O A. and interest do not change. B. increases and he gains interest. O C. decreases and he gives up interest. O D. decreases and he gains interest. O E. increases and he gives up interest.
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Please refer to the following graph: Yield Curve 2.00% 1.80% 1.60% 1.40% 1.20% 1.10% 1.00% 0.80% 1 year 2 year 1.50% 3 year 1.80% What does the market expect 1-year interest rate will be next year, according to the expectations theory? O 1.4% O 1.9% O 1.3% O 2.4%
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Suppose instead Larry decides to buy 100 shares of NanoSpeck stock. Which of the following statements are correct? Check all that apply. O C The price of his shares will rise if NanoSpeck issues additional shares of stock. NanoSpeck earns revenue when Larry purchases 100 shares, even if he purchases them from an existing shareholder. Expectations of a recession that will reduce economywide corporate profits will likely cause the value of Larry's shares to decline.
Question 38 Long-term bonds are generally I less risky than short-term bonds and so pay higher interest. less risky than short-term bonds and so pay lower interest. more risky than short-term bonds and so pay higher interest. more risky than short-term bonds and so pay lower interest. Question 39 On which bond is default most likely? P Type here to search 40 i3 esc (@ %23 LO
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Why is the relationship between price and yield negative?a. Because investors reward higher cash-flows with a lower price.b. Because governments regulation prohibits a positive relationship.c. Because an increase in the yield discounts cash flows at a higher rate and so their netpresent value decreases.d. Because cash flows are variable over a bond’s life.
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