Author Question: Which of the following bonds (of equal maturity) would have the lowest risk premium? A) U.S. ... (Read 42 times)

dollx · **on:** Jun 30, 2018

Which of the following bonds (of equal maturity) would have the lowest risk premium?

A) U.S. government bonds
B) German government bonds
C) the bonds of a financially stable corporation, like IBM
D) Bonds rated Aaa by Moody's
E) junk bonds

Question 2

For this question, assume that investment spending depends only on output and no longer depends on the interest rate. Given this information, an increase in the money supply

A) will cause investment to decrease.
B) will cause investment to increase.
C) will cause a reduction in the interest rate.
D) will have no effect on output or the interest rate.
E) will cause an increase in output and have no effect on the interest rate.