Clearly answer the following questions.

Read the following news report and answer the questions that follows.

The side effects of COVID-19 on vehicle demand

By Autovista Group senior data journalist Neil King

As countries bring the COVID-19 pandemic under control and relax lockdown measures, including the reopening of car dealerships and registration centres, demand for vehicles - both new and used - will recover. This is already the case in China, where reports suggest that demand is further benefitting from an ongoing aversion to public transport.Findings of an Ipsos survey conducted in China at the end of February revealed that 'non-car owners have a higher intention to acquire new cars, due to a lack of trust in public transportation.'

Yoann Taitz, operations director at Autovista Group in France, believes 'we may see, as in China, a wave to buy a private car to avoid taking public transport. In this case, people would focus more on B and C segment cars, and especially SUVs that are trendy, while D and higher segments that are already less attractive would be of even less interest.''This does of course depend on where in the country people live and the types of journeys they regularly need to take,' commented Jayson Whittington, chief editor, cars and leisure vehicles at Glass's. 'For people in inner cities, this will be almost impossible or certainly impractical. Also, many who regularly use public transport simply have to, due to the running costs and parking charges associated with a commute to work.'

Aside from public transport, car-rental companies are likely to suffer beyond their coronavirus-led woes and the mobility trend towards car-sharing may also dampen, at least in the short term.Ana Azofra, valuations and insights manager at Autovista in Spain commented: 'I think that in the next one to two years, a private car will give more security. In the first days of the crisis, before the lockdown, some car-sharing companies launched campaigns conveying that the cars would be disinfected every day, or even after every use. It did not work and their use fell dramatically.'

In the light of the above news report, answer the following questions.

Using an appropriate diagram, explain the impact of pandemic Covid-19 on the demand for public transport, and how it affects the market equilibrium.

(2 marks)

Based on the above news report, what would be the impacton the equilibrium price and quantity of private cars after the lockdown measures is relaxed. Illustrate and explain your answer using an appropriate diagram.

What is the relationship between 'public transport' and 'private cars'?

. The following questions appeared in past C Examinations. Give a brief explanation for each of your answers. (a) Which set of conditions will result in a bond with the greatest volatility? i. A high coupon and a short maturity. ii. A high coupon and a long maturity. iii. A low coupon and a short maturity. iv. A low coupon and a long maturity. (b) An investor who expects declining interest rates would be likely to purchase a bond that has a . . . coupon and a . .. term to maturity. i. Low, long. ii. High, short. iii. High, long. iv. Zero, long. (c) With a zero-coupon bond: i. Duration equals the weighted average term to maturity. ii. Term to maturity equals duration. iii. Weighted average term to maturity equals the term to maturity. iv. All of the above. 60. Please circle your answer to the following questions and provide a one-line explanation. (a) Holding the one-year real interest rate constant, if the nominal one-year interest rate where to increase by 1%, it would imply that the inflation rate over the same period i. Increased. Fall 2008 Page 25 of 66 ii. Declined. iii. Stayed the same. iv. It can go either way, impossible to tell from the provided data. (b) Consider two treasury bonds, A and B. Both have 5 years to maturity, A pays a 5% coupon rate, B pays a 7% coupon rate. Which of bonds A and B has higher modified duration, i. A. ii. B. iii. The same for A and B. iv. It can go either way, impossible to tell from the provided data. (c) A ten-year bond with a coupon rate of 6% and a face value of $100 is priced at $98. Let the yield to maturity be denoted by y. Which of the following statements is true: i. y > 6%. ii. y