Financial Markets and Institutions uark exam 2 questions and answers

Financial Markets and Institutions uark
exam 2 questions and answers
5% interest rate to 8% is a - - correct answer ✅discount


5% interest rate to 2% is a - - correct answer ✅premium


Most money market securities sell at a - - correct answer
✅Discount


Price Volitility formula - - correct answer ✅new price- old price/
old price x100


Lower coupon rate= ___________ price volatility - - correct answer
✅greater


Lower coupon bonds have a _______ interest rate - - correct
answer ✅greater


longer maturity= ___________ price volitility - - correct answer
✅greater


higher Interest Rates= _______ price volatility - - correct answer
✅lesser

, Financial Markets and Institutions uark
exam 2 questions and answers
interest rates increase, FV ______ - - correct answer ✅increases


interest rates decrease, FV _______ - - correct answer ✅decreases


lower coupon bonds have _______ interest rate risk - - correct
answer ✅greater


interest rates expected to increase, yield curve _______ - - correct
answer ✅upward sloping


interest rates expected to decrease, yield curve _______ - - correct
answer ✅downward sloping


Greater interest rate uncertainty, _______ liquidity premium - -
correct answer ✅greater


Tax exempt securities have _______ market yields - - correct answer
✅lower


More marketability, _______ yield - - correct answer ✅lower