Low interest rate policies helped japan to recover

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15. Low interest rate policies helped Japan to recover quickly from the last recession. a. True b. False
16. Which of the following statements about money markets is incorrect?
17. The duration of a $1000, 2-year, 7% coupon bond is ________ when market rates are 8%?
18. Which of the following statements about bonds is not true?
19. The term structure of interest rates a. Described the relationship between maturity and yield for similar securities. b. Ranks security yields according to the default risk structure. c. Describes how interest rates vary over time. d. Describes the pattern of interest rates over the business cycle.
20. A sharply upward sloping yield curve indicates that security investors expect future interest rates to _________ and bond prices to __________.
21. According to the expectations theory of the term structure of interest rates,
22. A two-year interest rate is 7% and a one-year forward rate one year from now is 8%. According to the expectations theory, what is the current one-year rate?
23. Which of the following statements explains the liquidity premium theory of the term structure of interest rates? a. Investors will pay higher prices for longer-term securities. b. Investors demand a lower yield for securities that cannot be sold quickly at high prices. c. Investors demand a higher return on longer-term securities with a greater price risk and less marketability. d. Investors will pay higher prices for securities with greater price risk and less marketability.

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