i puod ner promised vi ed at a 6.159, rity. 8. An investor is more likely to exercise a put option on a bond when A) interest rates are expected to increase. B) interest rates are expected to decrease. C) the security's price is expected to increase. D) the security's rating is upgraded by Moody's. maturity the maturity; the the duration of a 9. The the coupon rate and the bond, ceteris paribus. A. Larger, longer, longer B. Larger, longer, shorter C. Smaller, longer, longer D. Smaller, shorter, shorter 10. According to expectations theory, an investor who believes that interest rates are likely to decrease in the near future would A) would invest in short-term securities immediately. B) would invest in long-term securities immediately. C) would sell long-term securities from her portfolio. D) would sell short-term securities from her portfolio. 11. A restrictive monetary policy A. will decrease interest rate, decrease exchange rate, and promote exports. B. will increase interest rate, increase exchange rate, and promote imports. C. will decrease interest rate, increase exchange rate, and promote exports. D. will decrease interest rate, decrease exchange rate, and promote imports. 12. The sale of government securities by the Fed will 10 A. increase money supply B. increase security prices C. increase interest rates D increase credit availability 13. A decrease in reserve requirements will cause A. state and local government expenditures to fall. B. inflation expectations to fall. C. money supply to increase. D. excess reserves to increase. Thoth and D