https://www.rba.gov.au/publications/smp/2021/nov/

Section 3: Domestic Financial Conditions

This question is based on your reading 'Statement on Monetary Policy'. Policy measures employed by the RBA to support the economy and financial system during the Covid pandemic have included

informing market participants and the public about the future path of the policy interest rate

purchasing government bonds from banks

the Term Funding Facility

All of the listed options are true

This question is based on your reading 'Statement on Monetary Policy'. On page 37 it says 'The rise in yields had been associated with a marked increase in volatility and a noticeable reduction in bond market liquidity, particularly for shorter- dated bonds.' This is

consistent with general market phenomena in that short term bonds typically have higher volatility than long term bonds

inconsistent with general market phenomena in that short term bonds typically have lower volatility than long term bonds

inconsistent with general market phenomena because higher volatility is associated with reduced yields

None of the listed options is correct

This question is based on your reading 'Statement on Monetary Policy'. On page 37 it states: 'The Australian dollar has appreciated a little of late... It reached year-to-date lows in mid-August before retracing this move alongside the increase in yields on Australian Government bonds relative to those in the major advanced economies.' What is the link between yields and the dollar?

higher yields in Australia increase demand for Australian securities by overseas investors, and this results in increased supply of the Australian dollar, causing currency appreciation.

higher yields in Australia increase demand for Australian securities by overseas investors, and this results in increased demand for the Australian dollar, causing currency appreciation.

higher yields in Australia increase the supply of Australian securities as overseas investors look to sell them. This increases the supply of the Australia dollar, causing currency appreciation.

higher yields in Australia increase the supply of Australian securities as overseas investors look to sell them. This increases the demand for the Australia dollar, causing currency appreciation.

This question is based on your reading 'Statement on Monetary Policy'.How do RBA government bond purchases support the Australian Government Security yield target?

This is mainly a supply affect, reducing bond price

This is mainly a supply affect, increasing bond price

This is mainly a demand affect, reducing bond price

This is mainly a demand affect, increasing bond price

This question is based on your reading 'Statement on Monetary Policy'. Page 38 states: "Break-even inflation rates - which are measured as the difference between nominal and inflation-indexed bond yields and account for both inflation expectations and risk premia - have increased in Australia ...'. Break-even rates

are calculated based on bonds of similar credit quality and maturity

are calculated based on bonds of similar credit qualities but different maturities

imply that the inflation-linked investment will outperform the fixed-rate

All of the listed options are true