Question 1 Not yet answered Let Idenote the initial value of a loan or debt instrument, F the promised final value of the loan or instrument, and Tthe term of the loan or instrument. Marked out of 100 Consider the following statements, where F-300 and 7-2: P Flag question Statement A: If 1-250, then the simple annual interest rate is equal to 10% and the annual effective interest rate is equal to 9.54% Statement B: If I=240, annual effective interest rate is larger than 9.54%. Which of the statements given above is correct? Select one: Only statement A Neither statement A nor B Only statement B Both statement A and B What is the central function of money markets? Question 2 Not yet answered Marked out of 100 P Flag question Select one: To provide profitable low-risk investments, so that risk in the economy can be minimized. To ensure that the central bank and banks have good control over the liquidity in the economy. O To connect potential lenders to potential borrowers. To ensure that businesses have easy access to money. Let I denote the initial value of a loan or debt instrument, the promised final value of the loan or instrument, and Tthe term of the loan or instrument. Question 3 Not yet answered Marked out of 100 Which of the following gives the key characteristic of a discount instrument? P Flag question Select one: Discount rates are used to link Fand I The price is discounted to compensate investors for default risk. An additional discount is given to compensate investors for the fact that lis unspecified Fis specified, and I varies according to level of the interest rate. Consider the following statements: Question 4 Not yet answered Marked out of 1.00 Statement A: A note is a highly liquid type of bill, because it is exchange traded. Statement B: To buy a money-market instrument is essentially to grant a loan Flag question Which of the statements given above is correct? Select one: Neither statement A nor B Only statement A Only statement B Both statement A and B Consider the following statements: Question 5 Not yet answered Marked out of 100 Statement A: An interest rate can tell you how much interest will be earned for a loan of any size. Statement B: Higher interest rates result in a smaller discount factor. P Flag question Which of the statements given above is correct? Select one: Neither statement A nor B Only statement B Only statement A Both statement A and B