QUESTION 3

Which of the following assets is currently accepted by the Reserve Bank of Australia as a collateral for a (rev) repo?

	A.	Banks' issued debt securities
	B.	Household loans
	C.	Banks' shares
	D.	Central bank loans
	E.	Non-bank corporate securities

Which of the following equations is compatible with expectations theory of interest rates? [The notation follows the convention used in the course] [If you cannot see the equations below, you may need to set up Java.] A. (1 + oz)3 = (1 + 072)3 (1 +012) (1 + 013)3 B. (1 + 013)3 = (1 + 0/1) (1 +oj )(1+oj) + + . C. (1+013)3 = (1+0jj) (1+11) (1+zin) + D. (1 +012)= (1 + oi 1) (1 +11 ) (1+zjn) E. None of the above expressions are compatible with expectations theory