Which of the following describes the relationship between bond prices and bond yields?
a. There is a positive relationship between the yield and the price.
b. Every 1% increase in the bond price results in a 2% increase in the yield.
c. When the bond price is greater than the annual interest, yield is greater than one.
d. Bond price divided by the bid price is equal to the yield.
e. There is an inverse relationship between the yield and the price.
e
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For the money expansion process to produce the maximum potential multiplier effect
A) all loans of a given bank have to be deposited in that bank. B) the Fed has to sell government bonds to back up the loans. C) the required reserve ratio has to be 100 percent. D) all loans from banks have to be redeposited throughout the banking system.
Consumers expect that the price of a gallon of gasoline will rise next week. As a result
A) today's supply of gasoline increases. B) today's demand for gasoline increases. C) the price of a gallon of gasoline falls today. D) next week's supply of gasoline decreases.
The Federal Reserve is ________ the U.S. Treasury.
A. independent of B. a part of C. a creation of D. under the control of
For products with close substitutes, the demand curve slopes down.
Answer the following statement true (T) or false (F)