Quiz%2010 - Quiz 10 ECON 210 NAME: _ 1. Which of the...

Info iconThis preview shows pages 1–2. Sign up to view the full content.

View Full Document Right Arrow Icon
Quiz 10 – ECON 210 NAME: _______________________________________ 1. Which of the following statements is true? a. If individuals anticipate a higher inflation rate in the immediate future than in the long run, then bonds with longer maturity can have lower interest rates than bonds with shorter maturity b. Bonds with higher default risk will command lower interest rates than those with lower default risk c. Inflation that is higher than anticipated is more advantageous to lenders than borrowers d. An increase in the government deficit leads to an increase in money supply and thus a fall in interest rates 2. Suppose you buy a bond that promises to pay $1,000 a year from today at a price of $892.86. What is the interest rate on this bond? a. 10% b. 12% c. 14% d. 6% 3. A government bond with maturity greater than 10 years is known as a : a. A municipal bond b. Commercial note c. Treasury bond d. Treasury notes 4. Suppose you borrowed $10,000 from the bank that you have agreed to pay with interest
Background image of page 1

Info iconThis preview has intentionally blurred sections. Sign up to view the full version.

View Full DocumentRight Arrow Icon
Image of page 2
This is the end of the preview. Sign up to access the rest of the document.

This note was uploaded on 02/26/2012 for the course ECON 210 taught by Professor Staff during the Fall '08 term at Purdue University-West Lafayette.

Page1 / 2

Quiz%2010 - Quiz 10 ECON 210 NAME: _ 1. Which of the...

This preview shows document pages 1 - 2. Sign up to view the full document.

View Full Document Right Arrow Icon
Ask a homework question - tutors are online