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1. (15pts) Answer the following questions. (1) (3pts) What are the functions of financial markets and financial inter- mediaries? (2) (3pts) Consider the statement that

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1. (15pts) Answer the following questions. (1) (3pts) What are the functions of financial markets and financial inter- mediaries? (2) (3pts) Consider the statement that the market price will never change if it is at the equilibrium. Is it true or false? Please explain. (3) (3pts) A stock with high expected return is always worth investing. Is it true or false? Please explain. (4) (3pts) Inflation is always bad. Is it true or false? Please explain. (5) (3pts) If a company's bond rating is raised by a rating agency, how would its CDS (credit default swap) rate change? Please explain

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