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Assign_1 - Explain Q.7 In case of Coupon Bond yield to...

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Money, Banking, & Financial Markets (Econ210) Assignment # 1 (Due by 12:00 noon, Monday, June 11) Q.1 Liquidity Preference Framework and Loanable Fund Framework are one and same thing (T/F). Explain. Q.2 Demand for loanable funds is same as supply of bonds (T/F). Explain. Q.3 Monetary policy has no influence over the stock market (T/F). Explain Q.4 The current price of stock is C$50, dividend paid at the end of the year C$ 0.11, the required rate of return on equity is 10 percent, and the expected sale price at the end of the first year is C$ 55. Would you choose to buy this stock? Q.5 There is no difference between the Fisher Effect and the Business Cycle Expansion Effect (T/F). Explain Q.6 Yield to maturity is the most important way of calculating interest rate (T/F).
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Unformatted text preview: Explain Q.7 In case of Coupon Bond, yield to maturity is not related to bond price (T/F). Explain. Q.8 You are offered that you don’t have to pay the tuition fee (say C$ 2000) for the 2 nd semester at the beginning of the second semester but if you like you can pay it with the fee for the 3 rd semester (due at the beginning of the 3 rd semester) without any additional charges. Would you take this offer? Yes/No. Explain Q.9 Assume that from tomorrow there will be no money in the economy and you are given the choice to live either today or tomorrow. What will you choose and why. Explain. Q.10 Interest rate, capital gains and rate of return are same things (T/F). Explain...
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