Financial Markets by Yale University (Week
3) Exam Questions And Answers Latest
update 2025
Which of the following describes current short term interest rates?
-
correct answer ✅They are approximately equal to zero
What is the Federal Funds Rate and how long does it take to
mature? -
correct answer ✅The shortest term interest rate in the federal
government, which takes one day to mature.
If you put $1000 into an account with a 20% interest rate, how
much money will you have at the end of the year if interest is
compounded ONCE per year? -
correct answer ✅1200
How do coupon bonds work? -
correct answer ✅You purchase a bond for the same price you
eventually sell it for, but while it reaches maturity, you may clip
"coupons" off the bond and exchange them for money.
Question 5
, Financial Markets by Yale University (Week
3) Exam Questions And Answers Latest
update 2025
What is the main difference between a consol and an annuity? -
correct answer ✅The consol has a fixed price of $1 at inception
whereas the annuity price is given by the market.
The forward rate is: -
correct answer ✅The expected rate (yield) on a bond several
months or years from now.
The real interest rate is calculated by: -
correct answer ✅Subtracting the inflation rate from the nominal
interest rate.
Irving Fisher's Debt Deflation Theory starts from the observation
that: -
correct answer ✅Deflation redistributed real wealth from debtors
to creditors.
Market capitalization is calculated by using: -
correct answer ✅The price per share and the total number of
outstanding shares.
3) Exam Questions And Answers Latest
update 2025
Which of the following describes current short term interest rates?
-
correct answer ✅They are approximately equal to zero
What is the Federal Funds Rate and how long does it take to
mature? -
correct answer ✅The shortest term interest rate in the federal
government, which takes one day to mature.
If you put $1000 into an account with a 20% interest rate, how
much money will you have at the end of the year if interest is
compounded ONCE per year? -
correct answer ✅1200
How do coupon bonds work? -
correct answer ✅You purchase a bond for the same price you
eventually sell it for, but while it reaches maturity, you may clip
"coupons" off the bond and exchange them for money.
Question 5
, Financial Markets by Yale University (Week
3) Exam Questions And Answers Latest
update 2025
What is the main difference between a consol and an annuity? -
correct answer ✅The consol has a fixed price of $1 at inception
whereas the annuity price is given by the market.
The forward rate is: -
correct answer ✅The expected rate (yield) on a bond several
months or years from now.
The real interest rate is calculated by: -
correct answer ✅Subtracting the inflation rate from the nominal
interest rate.
Irving Fisher's Debt Deflation Theory starts from the observation
that: -
correct answer ✅Deflation redistributed real wealth from debtors
to creditors.
Market capitalization is calculated by using: -
correct answer ✅The price per share and the total number of
outstanding shares.
