Tutorial 4 Jeopardy

Chapter 5

100

What is the bond equilibrium equation?

B(demand)=B(supply)

200

How would an increase in expected inflation shift the demand curve for bonds?

Demand shifts left

300

What are the 4 determinants of Asset Demand

Wealth 

Expected Return

Risk

Liquidity

400

What are the 3 factors that shift the supply of bonds?

Profitability of investment

Expected inflation

Government Deficit

500

What is the equation for interest rate demand? (please writing on whit board)

i=R^e=(F-P)/P

Chapter 6

100

Which bonds are considered default free bonds?

U.S treasury bonds

200

What is a default risk?

When the issuer of the bond is unable or unwilling to make the interest payment.

300

What is the rating of a "junk bond"?

Below Baa (BBB)

400

The liquidity premium and preferred habits theory are a combination of which two theories?

Expectation theory & segmented markets theory.

500

What is the final equation for the expectation theory?

i_2t = (i_t + i^e_t+1)/2

Fun

100

Where is Miguel from?

ask Miguel

200

What is Oscars main sport?

Swimming

300

How do you spell the dude in the purple hoodie's name?

Mureithi

400

How many siblings does Oscar have?

4

500

Where is Oscar from?

Peru