sing the demand and supply curves for bonds, explain the effect of the following on the interest rates. a. A business cycle contraction b. Low inflationary expectation
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- What will happen in the bond market if the government imposes a limit on the amount of daily transactions? Which characteristic of an asset would be affected? How might it affect the interest rates. Explain with a graph. I want to see the answer to this question and steps. Thankswhat is the formula for the rate on long-term Treasury bonds?i. When interest rates __________, the market required rates of return ________, and the bond prices will ________. j. If interest rates increase after a bond issue, the yield-to-maturity will ______,
- Draw the demandand supply curves forthe bond market, andidentify the equilibrium interest rate.A shift in the demand curve for bonds occurs when the quantity demanded changes at each given interest rate. When a shift takes place, there will be a new equilibrium value for the interest rate. Explain how expected inflation may result in a shift in the demand for bonds.In preparation for this discussion, research the issue of consumer confidence. Document one or more methods used to characterize and measure consumer confidence. Compare and contrast how confidence might be related to financial markets’ expectations of risk of a recession, similarly to interest rate spreads. Do you find consumer confidence to be a useful measure? Explain why or why not.
- Question: Using the model of demand and supply for bonds, explain the low-interest rate phenomena in Japan. Illustrate your answers with 2 diagrams.Please explain the relationship between bond market and money market. Explain the process how an increase in the money supply by the Fed lowers the interest rate through the BOND MARKET to reach the new equilbrium interest rate. Explain the impact of increase in GDP on the interest rate.In the Great Depression, countries with the worst contractions suffered ________ _____ Expansionary policies adopted to support elected officials in the next election can create a _________ _______ _____ In addition to bond prices, changes in interest rates affect what other asset prices? _______ _____ and ______
- Type out the correct answer ASAP with proper explanation of the each option.thank you. How do trends in bond interest rates help predict changes in the business cycle? A.When long-term rates are higher than short-term rates, a recession is likely. B.When long-term rates are lower than short-term rates, an expansion is likely. C.When long-term rates are higher than short-term rates, a trough is present. D.When long-term rates are lower than short-term rates, a recession is likely.A shift in the demand curve for bonds occurs when the quantity demanded changes at each given interest rate. When a shift takes place, there will be a new equilibrium value for the interest rate. Explain how expected returns result in a shift in the demand for bonds.Which is TRUE about inflation and interest rates? *a. None of the choices.b. The inflation premium for long term bonds are higher.c. We have to invest in financial securities that will have a lower return on investment than the inflation rate.d. We have to invest in financial securities that will a higher return on investment than the inflation rate.e. Inflation does not affect the prices of the bond.
