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Unformatted text preview: Canada lowered its interest rate from 6% to 5%? Lower rates leads to an increase in price (Inverse relationship) b) You just received a cheque in the mail representing your semi-annual coupon payment on a Canada bond with a $50,000 face value and a 6% coupon. What is the amount of the cheque? $1,500 = ($50,000 * 6%)/2 Question 3 (3 marks) If you were to visit your local Honda dealership, there is both a primary and secondary market in action. Explain. Is the Honda retailer a dealer or broker? The new car lot is a primary market; every new car sold is the equivalent of an IPO. The used car lot is a secondary market. The Honda dealership is a “Dealer”, buying and selling out of inventory....
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- Winter '11
- Financial Markets