2 The Federal Funds rate a. is the rate commercial banks offer their most favored customers b. is the target rate used in the conducting of fiscal policy c. is usually a few percentage points lower than the Prime Rate d is the same of the state rate 3 Based on current market conditions, when labor reports are released, a stronger labor market report indicates a. nothing. The Fed (FOMC) isn't concerned with labor reports. Labor reports do not effect financial markets b. the Fed (FOMC) will most likely start lowering interest rate c. the Fed (FOMC) will most likely stop raising nterest rates d. the Fed (FOMC) will most likely continue on its rate increasing path 5 The most recent Weekly Initial Jobless Claims report (for week of 2/25/2023 ) a had jobless claims at 200,000 b had jobless claims at 195,000 c had jobless claims at 190,000 d had jobless claims at 185,000 6 A person just made hisher insurance payment and is now considered insured. They proceed to drive with less caution than before they were insured. We are most likely describing a self biased attribution b adverse selection c asymmetric information d moral hazard 7 In the late 1970 s and early 1980 s a. the inflation rate and unemployment were low leading to a low misery index b. interest rates and inflation were at historic highs c. interest rates were low and inflation high d interest rates and unemployment were low 8 A 6% coupon rate bond makes "semi-annual" interest rate payments. Par value is $1,000. The bond matures in six (6) years. The current price of the bond is 876.66 . Calculate the bonds YTM. a. 6.475% b. 7.420% c. 8.680% d. 9.296% 9 If one were to take the yields on treasury securities over a range of maturities and "plot" the points on a graph a. we are most likley desribing the federal funds rates b. we are most likely descrbing the fireign exchange market c. we are most likely describing the yield curve d. we are most likely describing the Employment Situation