The existence of goods of \'secondary marketability and the attempt to the heigh

Question

The existence of goods of 'secondary marketability and the attempt to the height of individual cash holdings explains the emer gence o a.) the debtors' risk premium b.) the deflationary price premium. c)the liquidity premium d.) none of the above he liquidity premium described in our course textbook the same as the liqued in class? premium of the deconstruction theorem of the nominal rate of 18. Is t a.) Yes, they are essentially identical in substance and content b.) No, the former is based on L-T vs S-T risk and the latter is based on C.) Yes, L-T bonds are riskier than S-T bonds hence L-T yields are higher than d.) No. the former is based on marketability and the latter is based on L-T vs S-T S-T yields risk. 19. A firm that is solvent is necessarily: a.liquid b.) illiquid c.) either liquid or illiquid depending on the individual case d.) none of the above. 20. A firm that is illiquid is necessarily: a) solvent b)Insolvent c.) either solvent or insolvent depending on the individual case d.) none of the above. The reserves of a depository institution (e.g., like those of a bank or of a savings & loan) serve what purpose? 21. a.) The bursar function of a bank or of a saving & loan. x b.) The meeting of legal requirements specified in state and federal law. c.) The facilitation of exchange transactions between the clientele and the non- clientele of a depository institution d.) Act to guarantee the solvency of a depository institution. 22. New credit arising out of the so-called credit expansion process is called: a.) direct and indirect credit b.) time deposit credit. c.) demand and time deposit credit. d.) circulation (or emission) credit. 23. The bursar function of the U.S. Treasury is similar to the: a.) bank-of-issue function performed by the Federal Reserve Boarc. b.) medium of exchange function performed by money. c.) general medium of payment function performed by money. K d.) controller function of a major business firm or institution

Explanation / Answer

Question 17). Answer :- Option c). Liquidity premium.

Question 18). Answer :- Option d). No, the former is based on marketability and the latter is based on the L-T vs S-T risk.

Question 19). Answer :- Option c). Either liquid or illiquid depending on the individual case.

Question 20). Answer :- Option c). Either solvent or insolvent depending on the individual case.

Question 21). Answer :- Option c). The facilitation of exchange transactions between the clientele and the non-clientele of a depositary institution.

Question 22). Answer :- Option c). Demand and time deposit credit.

Question 23). Answer :- Option a). Bank-of-issue function performed by the Federal Reserve Board.

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