18) If you purchased a U.S. Treasury Note @S105:20 with a par amount of $10,000, how much did you pay? A) $10,000 B) $10.520 C) $10,563 D) $1,052,000 19) The expected real interest rate approximately equals: A) the nominal interest rate plus the expected rate of inflation B) the nominal interest rate minus the ordinary tax rate C) the nominal interest rate minus the expected rate of inflation D) the yield to maturity on a coupon bond 20) Most foreign exchange trades are conducted: A) by tourists on vacation B) by multi-national corporations C) in global over-the-counter markets D) through regulated exchanges 21 ) If a government's tax receipts exceed its expenditures, the government is running a: A) deficit and is a net saver of funds B) surplus and is a net borrower of funds C) deficit and is a net borrower of funds D) surplus and is a net saver of funds 22) A decrease in expected inflation A) usually leads to a lower term structure of rates B) will always lead to more borrowings C) indicates the Central Bank will lower rates soon D) will reduce systematic risk 23) The risk structure of interest rates refers to:_. A) the difference in interest rates on similar bonds with different maturities B) the difference in interest rates on bonds with the same maturity C) the additional yield necessary to compensate savers for the liquidity of the bond D) the additional interest necessary to compensate savers for purchasing bonds below par 24) Which of the following is true of the segmented markets theory? A) It assumes that bonds with different maturities are perfect substitutes. B) It provides a good explanation for why yield curves usually slope upward. C) It assumes that different lenders have particular periods for which they want to invest. D) It demonstrates that lenders always prefer to invest for only short periods of time