Suppose the market for loanable funds is currently in equilibrium. Which of the following factors will cause an increase in the interest rate? Select one: O a. An increase in the household saving rate O b. An expansionary monetary policy O c. An increase in business confidence Od. A decrease in government budget deficits Travis buys a 20-year, $10,000 US Treasury bond with a coupon rate of 5%. After three years, he has some unexpected expenses and decides to sell the bond. In which market will Travis sell his bond? Select one: O a. The secondary bond market Ob. The primary bond market Oc. The Treasury bond market Od. The T-bond market

Suppose the market for loanable funds is currently in equilibrium. Which of the following factors will cause an increase in the interest rate? Select one: O a. An increase in the household saving rate O b. An expansionary monetary policy O c. An increase in business confidence Od. A decrease in government budget deficits Travis buys a 20-year, $10,000 US Treasury bond with a coupon rate of 5%. After three years, he has some unexpected expenses and decides to sell the bond. In which market will Travis sell his bond? Select one: O a. The secondary bond market Ob. The primary bond market Oc. The Treasury bond market Od. The T-bond market

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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Usually, when the supply of loanable funds increases, then interest rates Select one: O a. Decrease. O b. Increase. c. Remain unchanged. O d. Might increase or decrease.
1. You purchased a bond for $925. The bond has a face value of $1,000 and it pays a dividend once a year. You sold the bond for $850 after 3 years well before the bond reaches maturity. You find that in this investment you made a 4% rate of return. a) What is the amount of dividend that the bond paid you every year? b) What is the interest rate the bond is paying?
Figure 10-6 Real interest rate 6% 5 4 3 2 1 0 30 Select one: O O O O 60 90 _____ 120 150 a. supply; rise; decreasing; increasing b. supply; fall; increasing; decreasing c. demand; fall; decreasing; decreasing d. demand; rise; increasing; decreasing 180 will Refer to Figure 10-6. The loanable funds market is in equilibrium, as shown in the figure above. As a result of an increase in the government budget deficit, the thereby the equilibrium real interest rate and the equilibrium quantity of loanable funds. S Quantity of loanable funds (millions of dollars) for loanable funds
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Suppose you received a US savings bond as a gift, and the bond pays $100 at maturity, which is ten years from now. What happens to the present value of this bond payment if the interest rate increases? A. Present value increases B. Present value is not affected C. Present value declines
Geometric gradient. C.1.) A graduating class of civil engineers decides they will present the engineering college with a gift of $100,000 at their twenty-fifth reunion. There are 50 in the class and they can invest at 8 percent. They plan to start out giving a small amount at the end of the first year and in- crease their gifts to the class fund by 10 percent each year. Find the amount each graduate would donate at the end of the first year in order to reach their class goal of $100,000 at the end of 25 years. (Ans. C= $10.03)
Q: Draw a graph depicting the market for loanable funds and analyze the impact of open market operations when the interest rate is at or near the zero lower bound. a. Illustrate the supply and dem and for loanable funds, labeling the supply curve (S), the demand curve (D), and the initial equilibrium interest rate and quantity of loanable funds. b. Show the effect of open market operations on the supply of loanable funds, and analyze its impact on the price of loanable funds.c. Introduce a situation in which the market for loanable funds faces the zero lower bound (it may be easiest to draw a new graph for this for the purpose of clarity). d. Explain how open market operations typically influence the supply of loanable funds and interest rates in normal circumstances. e. Discuss why these operations become less effective when the interest rate is at or near the zero lower bound.
..relationship between bond price and interest rate. Explain it comprehensively and discuss in detail with real life examples. 1) There are 2) Discuss the concept of capital in terms of finance comprehensively and the ways it is raised in details. 3) Discuss the concept of capital market in detail focusing on how it functions in the financial market and how it satisfies suppliers (investors/savers) and demanders (companies/firms) by giving real life examples. 4) "The secondary market directly promotes capital formation." Do you agree with this statement? Why? Discuss in detail.
I need both answer ?
Suppose that you purchase a 2 year coupon bond at the time it is issued for $1100. The face value of the bond is $1000, with annual coupon payments of $80. a. What is the bond’s “coupon rate”? b. What is the bond’s “current yield”? c. What is the bond’s (nominal) “yield to maturity”? d. If you hold the bond for 1 year and sell it for $1035 (after collecting the first coupon payment), what is your “holding period rate of return”? Please answer all part otherwise Dounvote
Suppose that the demand for laonable funds for car in the Milwaukee area is $11million per month at an interest rate of 10 percent per year, $12million at an interest rate of 9 percent per year, $13million at an interest rate of 8 percent per year and so on. a. If the supply of loanable funds is fixed at $17million, what will be the equilibrium interest rate? b. If the government imposes a usury law and says that car loans cannot exceed 3 percent per year, how big will the monthly shortage (or excess demand) for car loans be? c. How big will the monthly shortage for car loans be if the usury limit is raised to 7 percent per year?
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