48) During business cycle expansions when income and wealth are rising, the demand for bonds and the demand curve shifts to the everything else held constant. OA) falls; right OB) falls; left C) rises; right OD) rises; left
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- There is a recent issuanceof asignificant number of treasury sharesat a higher interest rate. How wouldthis affect businesses: A. Individuals and businesses are encouraged to save, hence businesses will expect lower demand and lower prices.B. Individuals and businesses are encouraged to save, hence businesses will expect higher demand and lower prices.C. Individuals and businesses are encouraged to spend, hence businesses will expect lower demand and lower prices.D. Individuals and businesses are encouraged to spend, hence businesses will expect higher demand and higher prices.Given the following financial data for Bank of America (2020): Net Income $17,894Total Assets $2,832,182Total Liabilities $2,559,258 The equity multiplier is? Round answer to two decimal place.Based on current information on the U.S. stock market and the debt markets, including interest rates: (a) would you recommend that a firm raise funds through borrowing or by issuing stock? (b) would you recommend that a household build wealth by investing in the stock market or in real estate? Explain your answers to a. and b. Hint: You may begin with general information about current developments in the equity and debt markets, and the discuss how firms and households may use this information to make short-term and long-term financial decisions.
- Table shows the amount of savings and borrowing in a market, measured in millions of dollars, at various interest rates. What is the equilibrium interest rate and quantity in the capital financial market? Now, imagine the supply curve shifts so that there will be $50 million less supplied at every interest rate. Calculate the current and the new equilibrium interest rate and quantity, and explain the situation: the reasons of decrease of supply and what new equilibrium mean. Interest rate Qs Qd 5 200 470 6 270 320 7 320 320 8 350 300 9 400 200 10 500 100Explain how and why this situation affects the investment demand curve Firms plan to increase current inventory levels.Predict what will happen to interest rates on a corporation’s bonds if the federal government guaranteestoday that it will pay creditors if the corporation goesbankrupt in the future. What will happen to the interestrates on Treasury securities?
- d. graph of the financial market equilibrium. Label axes, curves, and project on axes the values you found in the previous two questions. Comment on why the NX=1 has the effect on investment that it does. e. Now, the government deepens its budget deficit to G-T = 2. For simplicity, assume that output and savings don't react. Find the new quantity of investment supplied. f. Find the new equilibrium interest rate, and report it here in decimals. g. graph of the financial market comparative statics. Label axes and curves, specifically label investment supply before and after with I0 and I1. Show on axes how the equilibrium quantity and rental rate change.Q1.Table shows the amount of savings and borrowing in a market, measured in millions of dollars, at various interest rates. What is the equilibrium interest rate and quantity in the capital financial market? Now, imagine the supply curve shifts so that there will be $5 million more supplied at every interest rate. Calculate the new equilibrium interest rate and quantity, and explain the situation: the reasons of increase of supply and what new equilibrium mean Interest rate Qs Qd 5 200 470 6 270 320 7 300 300 8 350 250 9 400 200 10 500 100Explore the assertion regarding the state ofFinancial Markets, both globally and within the Caribbean region, evaluating whether they arecharacterized by market perfection or imperfection. Argue in favorthat markets are perfect , allowing for a comprehensive examination ofthe topic. To enhance the analysis of key points in the subject argument, it is imperative to employrelevant finance theories or concepts which either validate or refute the EMH. These concepts serveas a robust framework for understanding financial phenomena. By leveraging established concepts,one can systematically evaluate the evidence presented, thereby bolstering the argument'scredibility and depth.
- 1. f the current interest rate on a 1-year bond is 2.80% while market participants expect a 1-year interest rate of 1.30% next year, then the expectations theory predicts that the interest rate on a 2-year bond will be ___ %: 2. If the current 1-year interest rate is 3% and the current interest rate on a 2-year bond is 4%, what is the expected 1-year rate starting a year from today? 3. You observe that currently, a 1-year bond has an interest rate of 3.00% while a 2-year bond has an interest rate of 3.00%. This means that, according to the expectations theory (no liquidity premium), market participants expect the 1-year interest rate in one year from now to be ___%:Suppose that Intel is considering building a new chip-making factory a. Assuming that Intel needs to borrow money in the bond market, why would an increase in interest rates affect Intel’s decision about whether to build the factory? b. If Intel has enough of its own funds to finance the new factory without borrowing, would an increase in interest rates still affect Intel’s decision about whether to build the factory? Explain!8, Q4) Hey, need help with the following multi-part macroeconomics problem. Thank you in advance! In this problem, consider a simple mutual fund. Households and businesses invest in the fund by buying shares; the fund uses this money, in turn, to invest in a range of assets, including equities and bonds. If an investor wishes to divest from the fund, she can “redeem” her shares. Redeeming involves selling the shares back to the mutual fund for a price called the “net asset value” (NAV). The NAV is equal to the difference between assets and liabilities, divided by the total number of investors in the fund (similar to the shareholders’ equity discussed in this chapter). The NAV is updated at the end of each day. Thus every investor who redeems on a given day will get the same price. What does this fund’s balance sheet look like? Suppose several large investors in the mutual fund start getting nervous about market conditions and decide to redeem, all on the same day. How will these…