Saikat Mitra. M&B. CH.5

Saikat Mitra. M&B. CH.5 - case. Stocks will be...

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Saikat Mitra HW Chapter 5, 4. a) I will buy more bonds because if it is easier to sell, it is more liquid and I can cash out easily and faster. b) I will buy more because if stocks go down, the demand for bonds will go up hence the chance of making more money will exist in buying bond. As people will want to buy bonds and so, I will sell with easy profit. c) I will buy less bonds because the opportunity cost of buying bonds will be higher in this
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Unformatted text preview: case. Stocks will be easier/less expensive to buy so I wont buy as much bonds. d) I will buy fewer bonds because in this case the expected return of bond will seem smaller because with higher interest rate will mean that the value of the bond goes down. e) I will buy more bonds because the expense of buying bonds will be less and it will be an advantage. 6. Submitted on Paper in Class! WEB EX: Year:1987, Cost: 11.09...
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