1. Youve noticed the yield spread between AAA corporate bonds and Treasury bonds has increased in recent months. Which of the possible explanations is least likely to cause this to occur?

Investors are rushing toward quality
		The Federal Reserve has been selling Treasury bonds
		Congress is debating a cut in spending and borrowing
		Investors have become more risk averse

2.

1. Youve just received a windfall of $25,000. You dont believe the money is needed at the time and decide to put it away. How does your situation impact the market determined cost of money?

Your risk tolerance is high. This increases the demand for available funds
		Your time preferences for consumption of the money is in a future period. This increases the supply of available funds
		Your time preferences for consumption of the money is in a future period. This increases the demand for available funds
		Your risk tolerance is high. This increases the supply of available funds.