6-Chp5-Econ3310 - Bond Market Equilibrium Interest Rates...

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Unformatted text preview: Bond Market Equilibrium Interest Rates Market for Money: LPF Equilibrium Interest Rates in LPF 5. negatively related to the information costs incurred 4. positively related to its liquidity relative to alternative assets 3. negatively related to the risk of its returns relative to alternative assets (if risk averse) 2. positively related to its expected return relative to alternative assets 1. positively related to wealth Holding all other factors constant (ceteris paribus), the quantity demanded of an asset is Theory of Asset Demand Asset Demand ...
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