3. Last month, corporations supplied $250 billion in one-year discount bonds to investors at an aver- age

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3. Last month, corporations supplied $250 billion in one-year discount bonds to investors at an aver- age market rate of 11.8%. This month, an additional $25 billion in one-year discount bonds became available, and market rates increased to 12.2%. Assuming a loanable funds framework for interest rates, and that the demand curve remains constant, derive a linear equation for the demand for bonds, using prices instead of interest rates.

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Financial Markets and Institutions

ISBN: 978-0321280299

5th edition

Authors: Frederic S. Mishkin, Stanley G. Eakins

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