You are watching: Which of the following statements about the term of a bond is correct?
Answer 1 d. Interest rates on permanent bonds are typically higher than interemainder rates on temporary bonds. Other statements are false concerning the question asked . Answer 2 b. less riskies than permanent bonds ….....................interest…View the complete answer
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Transcribed picture text: 1. Which of the following statements around the term of a bond is correct? a. Term describes the various qualities of a bond, consisting of its interemainder rate and tax therapy b. The term of a bond is determined entirely by its crmodify threat c. The term of a bond is figured out completely by exactly how much sales charge the buyer of the bond pays once he or she purchases the bond. d. Interest prices on irreversible bonds are generally higher than interest rates on short-lived bonds. 2. Short-term bonds are generlly much less risky than permanent bonds and so they feature higher interemainder prices. a. b. less risky than irreversible bonds and also so they attribute reduced interemainder prices. c. more risky than long-term bonds and also so they attribute better interemainder prices d. even more riskies than permanent bonds and so they attribute reduced interemainder prices. Two bonds have actually the exact same term to maturity. The initially was issued by a state federal government and the probcapacity of default is thought to be low. The other was issued by a corporation and also the probcapability of default is believed to be high. Which of the adhering to is correct? a. Because they have actually the very same term to maturity the interemainder prices must be the same. b. Due to the fact that of the differences in taxation therapy and also credit danger, the state bond need to have actually the 3. greater interemainder rate. Since of the differences in taxation therapy and also credit hazard, the corpoprice bond should have actually the higher interest price. c. d. It is not possible to say if one bond has actually a greater interest rate than the other. Suppose that in a closed economic climate GDP is equal to $10,000, taxes are equal to $500, intake amounts to $7,500, and also government purchases equal $2,000. What is national saving? a. $-500 b. $500 4. c. $1,500 d. None of the above is correct. 5. If tright here is shortage of loanable funds, then the supply for loanable funds shifts right and the demand also shifts left. a. b. the supply for loanable funds shifts left and the demand also shifts right. neither curve shifts, yet the quantity of loanable funds gave rises and the quantity c. demanded decreases as the interemainder rate rises io equilibrium d. neither curve shifts, yet the quantity of loanable funds provided decreases and also the quantity demanded boosts as the interemainder price drops to equilibrium. 6. If the supply of loanable funds shifts to the ideal, then the equilibrium interemainder price a. and also amount of loanable funds climb. b. and also amount of loanable funds loss. c. rises and also the amount of loanable funds falls d. falls and also the amount of loanable funds rises. 7. Other things the exact same, when the interest rate rises people would want to lfinish more, making the supply of loanable funds increase. human being would certainly desire to lfinish less, making the supply of loanable funds decrease. people would certainly desire to lfinish more, making the amount of loanable funds offered increase human being would certainly want to lfinish much less, making the amount of loanable funds offered decrease a. b. d.