Homework Answers
1. The aswer is "2%"
Opportunity cost of holding cash in checking account = 3 % - 1 % = 2%
2.The introduction of ATM increased the demand for cash because it made cash easier to get.
3. The ECB was established in 1999, when the euro was adopted.
European Central bank was established in 1998, but the ECB dosent have powers to act until the adoption of EURO currency in 1999.
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If a checking account has an interest rate of 1% and a Treasury bill has an...
If the quantity of money demanded is $100 billion and the quantity of money supplied is...
If the quantity of money demanded is $100 billion and the quantity of money supplied is $200 billion, then the interest rate will: Select one: O a. remain unchanged. O b. be in equilibrium. O c. fall. O d. rise. If a checking account has an interest rate of 1% and a Treasury bill has an interest rate of 3%, the opportunity cost of holding cash in a checking account is: Select one: 0 a. 0.02%. O b. 2%. c...
1. The interest rate on Treasury bills (with short maturities) can be thought of as the...
1. The interest rate on Treasury bills (with short maturities) can be thought of as the opportunity cost of holding (non-interest bearing) money. We think of the money stock as being determined by the Federal Reserve. In the liquidity preference graph, we put the interest rate on the vertical axis and the amount of money supplied and demanded on the horizontal axis. An increase in the money supply a. shifts the demand for money curve to the left, which causes...
pls do 35-40 35. When moving $500 from your checking account to your savings account this...
pls do 35-40
35. When moving $500 from your checking account to your savings account this transaction will impact the M1 and M2 money supplies by a. decreasing the M1 by $500. The M2 will be unchanged. b. decreasing the M1 by $500 and increasing the M2 by $500. c. not affecting the M1. But the M2 will increase by $500. d. not affecting the M1 and M2. Both will be unchanged. 36. The funds that banks are required by...
Suppose the interest rate and therefore the yield to maturity) increases by the same amount on...
Suppose the interest rate and therefore the yield to maturity) increases by the same amount on Treasury bills and bonds. Between a one-year Treasury bill, and a twenty-year Treasury bond, an investor would prefer a one-year Treasury bill The following are reasons why the yield to maturity can be less than than the return of a bond except that O A. the time to maturity and the holding period are not the same OB. the coupon payment over the purchase...
6.The current one-year Treasury bill rate is 4.2%. The expected one-year rate, one year from now...
6.The current one-year Treasury bill rate is 4.2%. The expected one-year rate, one year from now is 5.1%. According to the pure expectations theory, what should be today’s rate for a two-year Treasury security. Select one: a. 4.200% b. 4.649% c. 5.100% d. 3.050% e. 4.973% 15,Until the 1960's, limits on the interest rates that banks could pay to depositors had virtually no impact on the ability of banks to compete with other financial institutions to obtain funds because: Select...
navigation 2 3 4 5 Question 1 Not yet answered Supposed that the interest rate in...
navigation 2 3 4 5 Question 1 Not yet answered Supposed that the interest rate in Saudi Arabia is 11%, and the interest rate in the European Union is ex The current spot exchange rate between the Saudi Riyal and the Euro is 1 SAR 0.2458 EURO. According to interest Rate Parity theory, what is the equilibrium Forward rate Z89 Marked out of 1.00 attempt... Flag question Select one: a. -0.3261 b. -0.2526 c. 0.3261 Tt 0:16:40 d. 0.2526
#13 What is the expected one-year interest rate on a 1-year 1-Bill in four years? 12....
#13
What is the expected one-year interest rate on a 1-year 1-Bill in four years? 12. YOP, Inc has a 3-year outstanding bond with 13% yield. Investors expect to earn an average of 3% in real rate of return. Inflation is expected to be 1.5%, 2.0% and 4% for the next 3 years. Its lack of popularity in the financial market requires it to pay 2.5% for its lack of liquidity, and its relatively short amount of time before maturity...
5) If the three-month Treasury bill yields 3.1%, a ten-year Treasury note yields 4.7%, and a BBB-rated ten-year corpor...
5) If the three-month Treasury bill yields 3.1%, a ten-year Treasury note yields 4.7%, and a BBB-rated ten-year corporate bond yields 6.5%, what is the term spread? _______ A) 1.60% B) 4.70% C) 1.80% D) 3.40% 6) The expectations theory indicates an upward-sloping yield curve occurs because investors expect rates to: _______. A) rise B) fall C) eitherriseorremainconstant D) noconclusioncanbedrawn 7) Banks deal with problems of adverse selection by: _______. A) gathering financial information about the borrower B) making only...
TRUE OR FALSE 1) A non-interest bearing checking account is still considered an investment. 2) Earning a high rate of re...
TRUE OR FALSE 1) A non-interest bearing checking account is still considered an investment. 2) Earning a high rate of return with little or no risk is a realistic investment goal. 3) Underwriters are responsible for promoting and facilitating the sale of securities. 4) Only U.S. corporations can list their stocks on the NYSE. 5) A market maker brings together buyers and sellers in an auction market. 6) Margin trading requires the borrowing of securities. 7) An investor who mistakenly...
15. Which of the following items is assets of a bank A. loans B. checking account deposits C, saving account deposits D. money borrowed from Federal Reserve 16. In an open economy, if a country has a...
15. Which of the following items is assets of a bank A. loans B. checking account deposits C, saving account deposits D. money borrowed from Federal Reserve 16. In an open economy, if a country has a trade surplus, which is NOT correct-? A. Exports > Imports. C. Saving > Investment D. Net capital outflow> 0 17. Inflation will be reflected as the directly proportional change of A. Total money supply increase B. Nominal wage growth, but not nominal interest...
If the quantity of money demanded is $100 billion and the quantity of money supplied is $200 billion, then the interest rate will: Select one: O a. remain unchanged. O b. be in equilibrium. O c. fall. O d. rise. If a checking account has an interest rate of 1% and a Treasury bill has an interest rate of 3%, the opportunity cost of holding cash in a checking account is: Select one: 0 a. 0.02%. O b. 2%. c...
1. The interest rate on Treasury bills (with short maturities) can be thought of as the opportunity cost of holding (non-interest bearing) money. We think of the money stock as being determined by the Federal Reserve. In the liquidity preference graph, we put the interest rate on the vertical axis and the amount of money supplied and demanded on the horizontal axis. An increase in the money supply a. shifts the demand for money curve to the left, which causes...
pls do 35-40
35. When moving $500 from your checking account to your savings account this transaction will impact the M1 and M2 money supplies by a. decreasing the M1 by $500. The M2 will be unchanged. b. decreasing the M1 by $500 and increasing the M2 by $500. c. not affecting the M1. But the M2 will increase by $500. d. not affecting the M1 and M2. Both will be unchanged. 36. The funds that banks are required by...
Suppose the interest rate and therefore the yield to maturity) increases by the same amount on Treasury bills and bonds. Between a one-year Treasury bill, and a twenty-year Treasury bond, an investor would prefer a one-year Treasury bill The following are reasons why the yield to maturity can be less than than the return of a bond except that O A. the time to maturity and the holding period are not the same OB. the coupon payment over the purchase...
navigation 2 3 4 5 Question 1 Not yet answered Supposed that the interest rate in Saudi Arabia is 11%, and the interest rate in the European Union is ex The current spot exchange rate between the Saudi Riyal and the Euro is 1 SAR 0.2458 EURO. According to interest Rate Parity theory, what is the equilibrium Forward rate Z89 Marked out of 1.00 attempt... Flag question Select one: a. -0.3261 b. -0.2526 c. 0.3261 Tt 0:16:40 d. 0.2526
#13
What is the expected one-year interest rate on a 1-year 1-Bill in four years? 12. YOP, Inc has a 3-year outstanding bond with 13% yield. Investors expect to earn an average of 3% in real rate of return. Inflation is expected to be 1.5%, 2.0% and 4% for the next 3 years. Its lack of popularity in the financial market requires it to pay 2.5% for its lack of liquidity, and its relatively short amount of time before maturity...
15. Which of the following items is assets of a bank A. loans B. checking account deposits C, saving account deposits D. money borrowed from Federal Reserve 16. In an open economy, if a country has a trade surplus, which is NOT correct-? A. Exports > Imports. C. Saving > Investment D. Net capital outflow> 0 17. Inflation will be reflected as the directly proportional change of A. Total money supply increase B. Nominal wage growth, but not nominal interest...
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