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hw_8 - View Attempt...

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View Attempt https://compass.uiuc.edu/webct/urw/lc178263038031.tp178316624131/v... 1 of 19 3/27/2008 7:57 AM View Attempt 0 of 1 Title: HW 8 (CH 11) Started: March 27, 2008 7:57 AM Submitted: March 27, 2008 7:57 AM Time spent: 00:00:05 Comments: Total score: 0/27 = 0% Total score adjusted by 0.0 Maximum possible score: 27 Done 1. A $2,000 bond that pays $400 in interest per year has an interest rate of Student Response Value Correct Answer Feedback 1. 20% 100% 2. 10% 0% 3. 40% 0% 4. 2% 0% 5. 5% 0% Score: 0/1 Comments: 2. An individual's optimal balance depends on Student Response Value Correct Answer Feedback 1. the costs paid for switching from bonds to money. 0% 2. the costs paid to the Federal Reserve and the costs paid for switching from bonds to money. 0%
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View Attempt https://compass.uiuc.edu/webct/urw/lc178263038031.tp178316624131/v... 2 of 19 3/27/2008 7:57 AM Student Response Value Correct Answer Feedback 3. the interest earned on bonds and the costs paid to the Federal Reserve. 0% 4. the interest earned on bonds and the costs paid for switching from bonds to money. 100% Score: 0/1 Comments: 3. When interest rates are low, Student Response Value Correct Answer Feedback 1. the cost of holding money is high. 0% 2. bonds are more attractive than money. 0% 3. the optimal balance is biased toward bonds. 0% 4. individuals hold most of their assets in the form of money. 100% 5. individuals hold most of their 0%
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View Attempt https://compass.uiuc.edu/webct/urw/lc178263038031.tp178316624131/v... 3 of 19 3/27/2008 7:57 AM Student Response Value Correct Answer Feedback assets in the form of bonds. Score: 0/1 Comments: 4. At high interest rates, Student Response Value Correct Answer Feedback 1. holding bonds is more attractive than holding money. 100% 2. holding money is more attractive than holding bonds. 0% 3. the return on bonds is low. 0% 4. money demand is high. 0% 5. holding money incurs only a small sacrifice in interest. 0% Score: 0/1 Comments: 5. When interest rates rise, Student Response Value Correct Answer Feedback 1. the speculation 0%
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View Attempt https://compass.uiuc.edu/webct/urw/lc178263038031.tp178316624131/v... 4 of 19 3/27/2008 7:57 AM Student Response Value Correct Answer Feedback motive becomes weaker. 2. bond values rise. 0% 3. the opportunity cost of holding cash balances is low. 0% 4. money demand increases. 0% 5. bond values fall. 100% Score: 0/1 Comments: 6. The speculation motive for holding bonds implies that investors may wish to hold bonds when interest rates are ______ with the hope of selling them when interest rates ______. Student Response Value Correct Answer Feedback 1. high; stabilize 0% 2. low; fall further 0% 3. high; rise further 0% 4. high; fall 100% 5. low; rise 0% Score: 0/1 Comments: 7. During a recession, the Fed would most likely Student Response Value Correct Answer Feedback 1. decrease the discount rate.
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