Tutorial 7 - MODULE INTERMEDIATE MACROECONOMICS BFE202...

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Algebra & Trigonometry
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Chapter 5 / Exercise 19
Algebra & Trigonometry
Larson
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1 MODULE: INTERMEDIATE MACROECONOMICS BFE202 TUTORIAL 7Financial Markets and Expectations Multiple-Choice Questions1) Suppose a bond promises to make a single payment at maturity. These types of bond are called A) junk bonds. B) indexed bonds. C) corporate bonds. D) discount bonds. E) constant maturity bonds.
2) Which of the following represents the ratio of coupon payments to the price of a bond?
3) An upward-sloping yield curve suggests that financial market participants expect short-term interest rates will
4) Suppose the current one-year interest rate is 4%, and financial markets expect the one-year interest rate next year to be 8%. Given this information, the yield to maturity on a two-year bond will be approximately
5) Suppose the central bank implements a monetary expansion that is NOT fully anticipated by financial markets. Given this information, we would expect A) stock prices to rise.
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Algebra & Trigonometry
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Chapter 5 / Exercise 19
Algebra & Trigonometry
Larson
Expert Verified
2 B) stock prices to fall. C) stock prices to remain unchanged. D) an ambiguous effect on stock prices. E) none of the above
6) Suppose policy makers implement a fiscal expansion that is NOT fully anticipated by financial market participants. We know that this will

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