PROBLEMS AND APPLICATIONS

PROBLEMS AND APPLICATIONS I. For each of the following pairs, which bond would you expect to pay a higher interest rate? Explain. a. a bond of the U.S. government or a bond of an East European government b. a bond that repays the principal in year 2005 or a bond that...

QUESTIONS FOR REVIEW

QUESTIONS FOR REVIEW 1. What is the role of the financial system? Name and describe two markets that are part of the financial system in the U.S. economy. Name and describe two financial intermediaries. 2. Why is it important for people who own stocks and. bonds to...

CONCLUSION

CONCLUSION “Neither a borrower nor a lender be,” Polonius advises his son in Shakespeare’s Hamlet. If very one followed this advice, this chapter would have been unnecessary Few economists would agree with Polonius. In our economy, people borrow and...