2.Debt Securities include commercial paper Treasury bonds and corporate bonds Tr
ID: 2637948 • Letter: 2
Question
2.Debt Securities include commercial paper Treasury bonds and corporate bonds
True false
5. the substantial decline in interest rates during the credit crisis is attributed to which of the following changes in the market for loanable funds
a. an increase in both the supply of and the demand for loanable funds
b. decrease in both the supply and demand for a loanable funds
c decrease in the supply of loanable funds and an increase in the demans
d an increase in the supply and decrese in the demand
16 the fed purchase of long term treasury securities in recent years were intended to
Reduce long-term interest rates
Reduce interest rates on credit cards and consumer loans
Increase the federal funds rate
Restore confidence in the market for these securities
Explanation / Answer
True. Debt securities is bought or sold between two parties and has basic terms defined, such as notional amount (amount borrowed), interest rate and maturity/renewal date.
Q.5 d. An increase in the supply and decrease in the demand. General Economics Rule: If supply is greater than demand for a product, the price of the product decreases.
Q.16a. Reduce long term interest rates. The reduction in long-term interest rate will help fed to stimulate investment and other forms of spending.
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