Question
1. How often do most bonds issued in the U.S. pay coupon payments? 2. Name four factors that impact the risk premium portion of nominal
1. How often do most bonds issued in the U.S. pay coupon payments?
2. Name four factors that impact the risk premium portion of nominal interest rates.
3.The Pure Expectations Theory is based on what underlying theory of the risk-free rate?
4. The Liquidity Premium Hypothesis is based on what underlying theory of the risk-free rate?
5.What two aspects about a normal yield curve is the Liquidity Premium Hypothesis good at explaining?
6. True or False: If the Market Segmentation Theory were true, the Federal Reserve could set the rate on a 12-year Treasury Bond exactly where desired
7.According to the Fisher Effect, the nominal rate of interest is a function of two factors. Name them
8.You live in a world with a required reserve rate of 25%. What would this worlds simple reserve multiplier be?
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