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Why is the Overnight Reverse Repurchase rate (ON RRP rate) the actual
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- Expansionary monetary policy is aimed at ________ the federal funds rate and ________ the aggregate demand curve. lowering; increasing lowering; decreasing raising; increasing raising; decreasingHow is the market interest rate in the short-term and long-term financial market affected under the Pure Expectations theory when suppliers and users of loanable funds expect that interest rates will decrease the next year?Federal Reserve impact on inflation, growth and exchange rates: What happens to inflation, growth and exchange rates when the Federal Reserve decrease the required reserve ratio?
- What is the current market view on GBP/USD? (Will it appreciate and which depreciate? and why?)How should inflation expectations be included in analysis of capital projects?What happens to market-clearing, or equilibrium, interest rates in a capital marketwhen the supply of funds declines? What happens when expected inflationincreases or decreases?
- What are the two ways sinking funds can be handled? Which alternative will be usedif interest rates have risen? If interest rates have fallen?If reserves are scarce, how would the federal funds rate change (increase or decrease) if the Fed:(a) sells mortgage-backed securities(b) decreases the (minimum) reserve requirements(c) conducts overnight repo operations(d) conducts overnight reverse repo operations.If the inflation rate is positive, the expected NPV of an investment will be: A.understated if real cashflows are discounted by the nominal discount rate. B. understated if nominal cashflows are discounted by the nominal discount rate. C. overstated if the real cashflows are discounted by the nominal discount rate. D. understated if the nominal cashflows are discounted by the real discount rate.
- What is the two-step process can which performs deflation and discounting in market interest rate?What is the relationship between forward rates and the market’s expectation of future short rates? Explain in the context of both the expectations hypothesis and the liquidity preference theory of the term structure of interest rates.The following are discounting techniques in capital budgeting, except? discounted payback accounting rate of return present value index modified internal rate of return