Which of these entities are part of the so-called shadow banking industry?

b. Finance companies, mutual funds, and insurance companies

c. Savings and loan associations, large corporations, and mutual funds

d. Insurance companies, credit review companies, and investment banks

Travis buys a 20-year, $10,000 US Treasury bond with a coupon rate of 5%. After three years, he has some unexpected expenses and decides to sell the bond. In which market will Travis sell his bond?

a. The secondary bond market

c. The Treasury bond market

d. The T-bond market

Which of these could be a reason for a decrease in the demand for loanable funds?

a. A deterioration in business confidence

c. Lower expected household income

d. A decrease in expectations about future inflation

You are having a conversation with your friend Jasmine about the inverted yield curve that currently exists in the bond market. She explains this by saying that the inverted yield curve is because the Federal Reserve is implementing a contractionary monetary policy, which usually impacts only the short-term bond market. Her observation means that she is a proponent of the __________ theory of interest rates.

a. default premium

b. segmented market

d. term premium