When interest rates are low, the supply of loanable funds is low. T
As interest rates decrease, the demand of loanable funds increases. T
Which of the following does NOT impact interest rates:
economic growth
total wealth increase
open market operations
a

Name: _
FIN 4370
Week 1: Case Study Questions
Bernie Madoff / Lehman Brothers
Please remember that questions from case studies will be covered on the conceptual portion of
your exam! Feel free to use other sources to answer some questions (i.e. Google).
B

It is understood that a rate is an estimate of the annual rate when it is quoted in the following
syntax: [#]% compounded [time period]. T
A car loan is an example of a perpetuity. F
You just received a $10,000 gift from your grandmother and you wish to s

The Wall Street Journal reports the rate on two-year Treasury securities is 4.15% and the rate on
three-year Treasury securities is 5.27%. The one-year interest rate expected in two years, E(3r1),
is 7.11%. According to the liquidity premium theory, what

If weak form market efficiency is true, you can make money from technical analysis because the
current stock price reflects all historic information. F
Adjustable-rate mortgages contributed to the housing bubble and the financial crisis for all of the
fol

If the Fed decreases the discount rate:
a. this is an example of a contractionary activity.
b. they want to encourage banks to lend more money.
c. they are worried about inflation.
d. none of the above.
The Federal Reserve performs all of the following fu

Bond A has 4 years left to maturity and Bond B has 8 years left to maturity. They both have a
6% coupon rate, pays semiannually, and yield is 5%. Calculate the percentage change in each
bond if interest rates suddenly increased by 2%.
A: -7.27%, B: -13.38

Last year, you purchased a 5 year bond, pays semiannually, and has a coupon rate of 6%. If the
yield in the market is currently 5%, calculate the price of the bond today.
[(30) (1 1/1.025^10)] / .025 + 1000 / 1.025^10 = 1043.76
None of the above
Suppose y

Name: _
FIN 4370
Week 9: Assignment
Peer Group Ratio Analysis
Please remember that questions from this assignment be covered on the conceptual portion of
your exam! Feel free to use other sources to answer some questions (i.e. Google).
Read page 634 in yo