Phillip is a mortgage broker, who is paid by commission. When interest rates decline, he does a lot of business and earns a lot of money, as more people buy houses or refinance their mortgages. But when interest rates rise, business falls substantially. To diversify, Phillip should choose investments that
a. provide a higher return than the market average.
b. provide a lower return than the market average.
c. pay higher returns when interest rates rise and lower returns when interest rates fall.
d. pay lower returns when interest rates rise and higher returns when interest rates fall.
c
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Money targeting works when the demand for money curve is ________ and predictable. Technological change in the banking system has led to ________ and ________ shifts in the demand for money curve
A) stable; large; predictable B) unstable; large; unpredictable C) stable; small; unpredictable D) stable; small; predictable E) stable; large; unpredictable
Which of the following is an asset to a bank?
a. Checkable deposits b. Transaction deposits c. Credit cards d. Loans e. Borrowings from the Fed
When the FOMC sets a monetary policy, it first identifies its intermediate target and then works accordingly to achieve its ultimate goal
a. True b. False Indicate whether the statement is true or false
Wealth is redistributed from creditors to debtors when inflation was expected to be
a. high and it turns out to be high. b. low and it turns out to be low. c. low and it turns out to be high. d. high and it turns out to be low.