Answered step by step
Verified Expert Solution
Question
1 Approved Answer
Please, I desperately need help. This is the only last question post that I have. Please help me. Question 15 1 pts Use the figures
Please, I desperately need help. This is the only last question post that I have. Please help me.
Question 15 1 pts Use the figures below to answer the question. YTM YTM LE Maturity Maturity A B Which of the two term structure relationships could be explained by the liquidity preference model? Graph A and Graph B O Graph A only O Graph Bonly Neither Graph A nor Graph B Question 16 1 pts YTM B Use the diagram to answer the question A Maturity If the term structure shifts from curve A to curve B, then: Investors expect the inflation rate to decrease over time Long term bonds are more likely to default Investors expect the inflation rate to increase over time Long term bonds have become more liquid. Question 17 1 pts because the All else equal, if expected inflation increases interest rates will for bonds O fall: supply decreases O rise, supply increases O rise, demand, increases Orisedemand: decreases D Question 28 1 pts Assume the term structure is currently strictly upward sloping. If Congress passes a law that makes the income from 30-year Treasury Bonds exempt from income taxes (e.g., no income tax on the income the bonds provide), all else equal this would make the term structure o have a flatter of a slope shift all maturity rates down have a steeper slope shift all maturity rates up D Question 29 1 pts During a recession or time of economic uncertainty, investors are likely to become: More heterogeneous Less risk-averse More risk-averse Less homogeneous Question 30 1 pts A city purchases a credit guarantee from an insurance company such that if the city cannot make the coupon payments on the bonds it has issued, then the insurance company will make the coupon payments to the bond owners. Because of the insurance, the city's bonds will have a than if it had issued the same bonds without the credit guarantee. Greater risk Lower YTM O Higher YTM O Lower priceStep by Step Solution
There are 3 Steps involved in it
Step: 1
Get Instant Access to Expert-Tailored Solutions
See step-by-step solutions with expert insights and AI powered tools for academic success
Step: 2
Step: 3
Ace Your Homework with AI
Get the answers you need in no time with our AI-driven, step-by-step assistance
Get Started