Consider three types of coupon bonds: Bond A, Bond B, and Bond C. You have no information about these bonds except that, when local taxes recently increased, demand for Bond B rose while demand for Bonds A and C fell. Which is most likely true about Bond B ? Bond B is likely a US (federal) government bond, whils Bonds A and C are likely issued by firms. If we subtract Bond B's yield from the rate on another bond, we'll find the risk premium. Bond B is likely issued by state or local government. Bond B is likely a corporate bond, whereas the others are likely US (federal) government bonds. Question 2 When an economist says that the opportunity cost of holding cash has risen, this implies that the demand for money curve has shifted to the left the "price" of cash money has fallen interest rates are higher than they used to be people will prefer to hold more liquid assets Joe asked Bob for a loan in 2018; they agreed he would pay 10% per year in interest for eight years. These terms were set when inflation and interest rates on similar loans were much lower than today. The increases in inflation and interest the country experienced came as a surprise to both Joe and Bob. This situation Joe and Bob. Question 5 3 pts According to class materials, a smart beta ETF would be best for which of the following types of financial investors? One who thinks stock prices take a "random walk" One who supports the small firm effect One who wants to put an emphasis on safety over return One very good at calculating the price of a stock using the dividend-discount model