Financial Markets and Institutions, 7e (Mishkin)
Chapter 4 Why Do Interest Rates Change?
4.1 Multiple Choice
1) As the price of a bond ________ and the expected return ________, bonds become more attractive to investors and the quantity demanded ris.
A) falls; ris
B) falls; falls
C) ris; ris
D) ris; falls
Answer: A
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2) The supply curve for bonds has the usual upward slope, indicating that as the price ____
____, ceteris paribus, the ________ increas.
A) falls; supply
B) falls; quantity supplied
containedC) ris; supply
D) ris; quantity supplied
Answer: D
3) When the price of a bond is above the equilibrium price, there is excess ________ in the bond market and the price will ________.
A) demand; ri
B) demand; fall
C) supply; fall
D) supply; ri
Answer: C
4) When the price of a bond is below the equilibrium price, there is excess ________ in the bond market and the price will ________.
A) demand; ri
B) demand; fall
C) supply; fall
D) supply; ri
Answer: A
5) When the price of a bond is ________ the equilibrium price, there is an excess supply of bonds and the price will ________.
A) above; ri
B) above; fall
C) below; fall
D) below; ri
Answer: B
6) When the price of a bond is ________ the equilibrium price, there is an excess demand for bonds and the price will ________.
A) above; ri
B) above; fall
C) below; fall
D) below; ri
Answer: D
7) When the interest rate on a bond is above the equilibrium interest rate, there is excess ________ in the bond market and the interest rate will ________.
谷歌翻译网页A) demand; ri
B) demand; fall
C) supply; fall
D) supply; ri黛米 摩尔
Answer: B
8) When the interest rate on a bond is below the equilibrium interest rate, there is excess ________ in the bond market and the interest rate will ________.
A) demand; ri
B) demand; fall
C) supply; fall
D) supply; ri
Answer: D
9) When the interest rate on a bond is ________ the equilibrium interest rate, there is excess ________ in the bond market and the interest rate will ________.
A) above; demand; fall
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B) above; demand; ri
C) below; supply; fall
D) above; supply; ri
Answer: A
10) When the interest rate on a bond is ________ the equilibrium interest rate, there is excess ________ in the bond market and the interest rate will ________.
A) below; demand; ri
B) below; demand; fall
C) below; supply; ri
D) above; supply; fall
Answer: C
11) When the demand for bonds ________ or the supply of bonds ________, interest rates ri.
A) increas; increas
B) increas; decreas
C) decreas; decreas
D) decreas; increas
Answer: D
12) When the demand for bonds ________ or the supply of bonds ________, interest rates fall.
A) increas; increas
B) increas; decreas
C) decreas; decreas
D) decreas; increas
Answer: B
13) When the demand for bonds ________ or the supply of bonds ________, bond price
s ri.
A) increas; decreas
B) decreas; increas
C) decreas; decreas
D) increas; increas
Answer: A
14) When the demand for bonds ________ or the supply of bonds ________, bond prices fall.
A) increas; increas
B) increas; decreas
C) decreas; decreas
D) decreas; increas
Answer: D
15) Factors that determine the demand for an ast include changes in the
A) wealth of investors.
B) liquidity of bonds relative to alternative asts.
C) expected returns on bonds relative to alternative asts.
D) risk of bonds relative to alternative asts.
E) all of the above.
Answer: E
16) The demand for an ast ris if ________ falls.
A) risk relative to other asts
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B) expected return relative to other asts
C) liquidity relative to other asts
D) wealth
Answer: A
17) The higher the standard deviation of returns on an ast, the ________ the ast's ________.
A) greater; risk
B) smaller; risk
C) greater; expected return
D) smaller; expected return
Answer: A
碧昂丝 女儿lfish18) Diversification benefits an investor by
A) increasing wealth.
B) increasing expected return.
C) reducing risk.
D) increasing liquidity.
Answer: C
19) In a recession when income and wealth are falling, the demand for bonds ________ and the demand curve shifts to the ________.
A) falls; right
B) falls; left
C) ris; right
D) ris; left
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20) During business cycle expansions when income and wealth are rising, the demand for bonds ________ and the demand curve shifts to the ________.
