Assignment 1

Assignment 1 - Econ 500 Fall 2011 Z. Janko DEPARTMENT OF...

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1 DEPARTMENT OF ECONOMICS Econ 500 (01) – Money and Banking Fall 2011 Assigned Aug 25 th , 2011 DUE Sep 15 th , 2011 Assignments are due at the beginning of class. Answer ALL questions as best as you can. TYPE your answers to the short answer problem questions (except for any equations or graphs). Covers Chapters 1, 2, 3, and 4. Part I. Multiple Choice: Circle the BEST answer. 1. Looking at interest rates over time, generally: a. short term interest rates usually rise when long term interest rates rise. b. short term interest rates usually do not change when long term interest rates rise. c. short term interest rates usually rise when long term interest rates fall. d. None of the above are correct. 2. A security is a. A financial instrument that promises to make payments periodically for a specified period of time b. A bond c. A financial instrument that represents a share of ownership in a corporation d. A claim on the borrower’s future income that is sold by the borrower to the lender NOTE: another name for a security is “financial instrument”. 3. Which of the following statements is true regarding interest rates on US government bonds?
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This document was uploaded on 12/06/2011.

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Assignment 1 - Econ 500 Fall 2011 Z. Janko DEPARTMENT OF...

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