Market interest rates are established by the banks or any financial institutions. True or false?

Q: rates affect business? Consumers?

A: Market interest rate plays extremely essential part in the business and customer spending in light…

Q: What is the relationship between risk and return in finance? Why does this relationship hold in the…

A: A return refers to the additional net revenue received from the investment. Risk refers to the…

Q: Risk premiums on corporate bonds are usually anticyclical; that is, they decrease during business…

A: Risk-premium is the term used to define an additional gain from the investment to reduce the risk…

Q: Identify and explain the three theories of the term structure of interest rates, including any…

A: Introduction The link between short-term and long-term market interest rates is referred to as…

Q: Investors typically buy and sell stocks, bonds and other securities in the secondary market.…

A: Securities refers to financial instruments used to raise capital in private and public markets. The…

Q: CENGAGE MINDTAP Q Search this course Ch 06: Assignment - Interest Rates CAPITAL (Billions of…

A: The money rate of interest can be any declared or given rate of interest. In contrast, the real…

Q: If government spending were increased, what would occur to interest rates

A: Government spending refers to the money spent by the government on things like health care,…

Q: What happens to interest rates in the market when bond prices fluctuate a lot

A: Bond price:- Bond price can be explained as discounted present value of a bond's anticipated cash…

Q: What happens when interest rates increase? SAND

A: Interest rate plays an important role in the consumption and investment decisions of people and…

Q: If the Federal Reserve wants to set an interest rate that best promotes economic growth and new…

A: Answer - Need to find - factors should they consider Given in the question- If the Federal Reserve…

Q: Would usury laws help or hinder resolution of a shortage in financial markets?

A: Usury law is implemented by the government pertaining to interest on the loans taken by the…

Q: Real interest rates can be negative.  True  False

A: The real interest rate is the inflation adjusted interest rate. That is, inflation implies that real…

Q: Investors must go for investments that are liquid to ensure availability of funds when needed.  Is…

A: Liquidity is defined as the ability to exchange assets for cash. The more easier it is to convert an…

Q: What happens to the equilibrium price of bonds if the supply of bonds shifts leftward?   A. Bond…

A: The equilibrium is a state in which economic forces like supply and demand are balanced and the…

Q: What happens to interest rates in the market if the stock brokerage commission declines? Explain the…

A: In the stock market, interest rate is influenced by various market variables, such as demand,…

Q: Why is it hard to forecast future movements in stock prices?

A: Stock prices: The stock prices are the current prices that a share of a stock is trading in the…

Q: You will be LESS likely to buy bonds if: Stock prices become more volatile. You expect interest…

A: Individual investors seeking pay or the conservation of capital regularly consider adding bonds to…

Q: In the financial market, if the quantity of funds demanded is greater than the quantity of funds…

A: When the demand for funds increases and the supply of funds is not full fill that demand the…

Q: If the supply of financial capital increases   Interest rates will remain unchanged.   Interest…

A: Interest rate is determined by the demand and supply of financial capital.

Q: If there is a decreased demand for a financial asset. its yield will rise its current purchase price…

A: Demand for bonds shows that there exists an inverse relationship between the price of the bond and…

Q: One of the tasks of a Financial System include providing affordable loans to all consumers and…

A: Allocation of savings into channels of investment in the economy is being done by the financial…

Q: What has happened to the profitability of financial firms in the US economy in recent decades? Why…

A: After the global financial crisis of 2008-09, US financial companies have been doing very well;…

Q: What effect might a fall in stock prices have on businessinvestment?

A: Stock prices are a price at which the stock is being exchanged in the stock market. Stock market is…

Q: a) Graphically illustrate equilibrium in the bond market.

A: The interest rate and bond price have an inverse relationship exist between them. The price of bonds…

Q: Explain the bond markets in the real world.

A: A bond is an advance that the bond buyer, or bondholder, makes to the bond backer. Governments,…

Q: Why are bond prices and interest rates inversely related?

A: please find the answer below.

Q: How do economists define equilibrium in financial markets?

A: The price is the difference between what providers receive and what demanders pay in any market.…

Q: Explain why repurchase agreements (repo) and securities are used as a lending practice  in capital…

A: For government securities dealers, a repurchase agreement is a type of short-term financing. When a…

Q: If interest rates increase in financial markets, then...

A: Interest rates are defined as the charges taken by the lenders for the money lent ti the borrower.…

Q: What will happen in the bond market if the government imposes a limit on the amount of daily…

A: If the government imposes a limit on daily transactions, then the ones who buy and sell in the…

Q: Explain why financial markets are increasingly becoming global.

A: We have show that as an Financial markets have become international and highly active, with…

Q: Bankers have a reputation for conservatism in politics, dress, and business affairs. Is there an…

A: Yes it is rational. Th checking deposit that provided by the bank is the best example of the fiat…

Q: Why does longer-term bonds fluctuate more when interest rate change, than does shorter-term bonds

A: An investor's debt to a borrower is represented by a bond, which is a fixed-income investment. A…

Q: why does selling bonds by the Treasury to the financial market raise interest rates

A: The monetary policy is the policy of the central bank regarding the money supply and interest rate…

Q: Which of the following is a true statement? Multiple Choice ___ If interest rates fall, U.S.…

A: Interest rate and bonds value have inverse relation with each other. When the interest rate rises,…

Q: An efficient financial market means transaction costs.  True or False?

A: Transaction costs are the costs associated with purchasing or selling a product or service.

Q: In terms of the financial crisis of 2007 and 2008, what were the factors that led to the mortgage…

A: Answer in step 2

Q: You are considering purchasing a 10-year bond and follow the theory of rational expectations. If you…

A: Bonds have an inverse relationship to interest rate. When the cost of borrowing money rises, bond…