a) What are the different ways of classifying financial markets? Explain the primary market and secondary market in detail.

b) How much would you pay today, given that you can earn 7 per cent on low-risk investments, to receive a guaranteed$3,000 at the end of each of the next 20 year

c) If we use the monetary approach to exchange rate determination, what will be the predicted effect on the exchange rate of the domestic currency if domestic real income increases? Why?

d) For a given class of similar-risk securities, what does each of the following yield curves reflect about interest rates: i) downward-sloping, ii) upward-sloping, and iii) flat? Which form has been historically dominant?