the price at which a 91-day Treasury Bill is sold falls, which of the following statements are true? ! - The Bill's discount rises 2-The Bill's yield rises 3 - The Bill's yeld fails 4 - The Bil's discount fails
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If the price at which a 91-day Treasury Bill is sold falls, which of the following statements are true?
! - The Bill's discount rises
2-The Bill's yield rises
3 - The Bill's yeld fails
4 - The Bil's discount fails
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Solved in 2 steps
- Suppose that the Bank of Canada engages in monetary tightening, raising its Overnight Rate Target from 0.25 to 4 percent, so as to ‘build back better.’ (a) Why would no commercial bank borrow at a rate above the Bank Rate on theovernight market? (b) Why would no commercial bank lend at a rate below 3.75 percent on the overnightmarket?Question # One: After we study the Bonds Market, study the table below and fill in the blanks in it The Change Effect on The The The Supply or on Direction Effecteffect Demand? of shift on of i in the PB Curve An increase in the MPS An increase of liquidity of bonds Government budget is in deficit Expected returns on other assets increases An increase in the risk of bonds4. Tompton has estimated that near the point of equilibrium, the demand curve and sunnly oum for bonds can be estimated using the following equations: Bd: Price = -2 Quantity + 850 BS: Price = Quantity + 600 a. What is the expected equilibrium price and quantity of bonds in this market? b. Given your answer to part (a), which is the expected interest rate in this marketo
- E3 The demand curve and supply curve for one-year discount bonds were estimated using the following equations: Bd Price=-2/5Quantity+990 Bs Price=Quantity+500 As the stock market continued to rise, the Federal Reserve felt the need to increase the interest rates. As a result, the new market interest rate increased to 19.65%, but the equilibrium quantity remained unchanged. What are the new demand and supply equations? Assume parallel shifts in the equationsd. Now suppose that the supply of money is $1trn. Assume equilibrium in financial markets. Calculate the equilibrium interest rate. In equilibrium, money demand = money supply. $1.5 (0.8-2i) = $1 please show calculation step by stepIf the price at which a 91-day Treasury Bill is sold falls which of the following statements are true. (Select one or more answers) Select one or more: O The Bill's yield falls The Bill's discount rises The Bill's discount falls O The Bill's yield rises
- 24)To reassure investors who were unwilling to buy mortgages in the secondary market, the U.S. Congress used two government-sponsored enterprises (GSEs) called, ________. The GSEs role was to sell bonds to investors and use the funds to purchase mortgages from _______. Select one: a. the Fed and the Treasury Department; Households b. the Fed and Treasury Department; Banks c. Fannie Mae and Freddie Mac; Households d. Fannie Mae and Freddie Mac; Banks e. Fannie Mae and Freddie Mac; Investment Banks1. Analyse three factors That Cheapo Air would need to consider in setting a price for their business customers 2. Analyse the possible sources of finance available to Cheapo Air for capital expenditure 3. Analyse three factors that Cheapo Air would need to consider when deciding which finance strategy to useThe price of a bond O increases as interest rates in the financial sector increase O decreases as the price of precious commodities increase increases as interest rates in the financial sector decrease decrescos ar stock market values incrosco
- An FI has purchased a $201 million cap of 8 percent at a premium of 0.70 percent of face value. A $201 million floor of 4.1 percent is also available at a premium of .75 percent of face value. a. If interest rates rise to 9 percent, what is the amount received by the FI? What are the net savings after deducting the premium? b. If the Fl also purchases a floor, what are the net savings if interest rates rise to 10 percent? What are the net savings if interest rates fall to 3.1 percent? (Negative amounts should be indicated by a minus sign.) c. If, instead, the Fl sells (writes) the floor, what are the net savings if interest rates rise to 10 percent? What if they fall to 3.1 percent? (Negative amounts should be indicated by a minus sign.) a. Amount received Net savings b. Net savings if interest rates rise to 10 percent Net savings if interest rates fall to 3.1 percent c. Net savings if interest rates rise to 10 percent Net savings if they fall to 3.1 percentInterest Rate 0 Sm m Q Quantity of Money Refer to the diagram of the market for money. Given Dm and Sm, an interest rate of i3 is not sustainable because the: O demand for bonds in the bond market will decline and the interest rate will rise. O supply of bonds in the bond market will decline and the interest rate will rise. O supply of bonds in the bond market will increase and the interest rate will decline. O demand for bonds in the bond market will rise and the interest rate will fall.1) If a $2,000 one-year bond pays $170 in annual interest, the interest rate on this bond is (do NOT use decimal)? 2) If the interest rate changes to 19.5%, the bond price will be? 3) If the interest rate changes to 16.5%, bond price will be?
