Question 42

TRUE or FALSE. Explain your answer with NO MORE THAN THREE SENTENCES.

An increase in tariffs and quotas on imports causes a country's currency to appreciate.

Question 43

TRUE or FALSE. Explain your answer with NO MORE THAN THREE SENTENCES.

The default risk of a bond with sinking fund is lower and hence a lower yield is given.

Question 44

TRUE or FALSE. *Each question requires explanations (Max 3 sentences)*.

All else being equal, the greater the interest rate the greater the duration is.

Question 45

TRUE or FALSE. *Each question requires explanations (Max 3 sentences)*

A negative liquidity premium indicates that investors prefer long-term bonds over short-term bonds.