Bonds are a subcategory of credit, in the same way that publicly traded stocks are a subcategory of:

A.

Currencies

B.

Loans

C.

Credit

D.

Assets

E.

Liabilities

F.

Equity

The Metropolitan Washington Airports Authority (MWAA) borrows funds on the bond market for an airport renovation project. Suppose the federal government announces that it will guarantee the MWAA's debt payments should the MWAA default on its obligations. This announcement will likely:

A.

Have no effect on the yields on MWAA bonds

B.

Increase the yields on MWAA bonds

C.

Decrease the yields on MWAA bonds

D.

There is not enough information to make a prediction

According to the efficient market hypothesis:

A.

None of these options are correct

B.

Publicly available information gets immediately reflected in market prices

C.

Markets can never crash, because they are efficient

D.

Markets are primarily driven by the sentiments of investors

Which developments characterize the run-up to a "typical" financial crisis?

A.

We observe sharp increases in credit and asset valuations

B.

None of these answers are correct

C.

We observe several years of stagnating economic growth

D.

A contagious virus forces the economy to shut down