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1. There are two other scholars in your university. The first scholar, Tark tells you...

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Accounting

1. There are two other scholars in your university. The first scholar, Tark tells you that he thinks all bonds with different maturities are perfect substitutes. The other scholar, Damla argues bonds of different maturities are not substitutes at all and markets are completely segmented; interest rate at each maturity are determined separately. You think both of them are correct in some ways and hence you blend these two views and come up with the third argument. Bonds of different maturities are substitutes, but are not perfect substitutes. Please defend your theory and explain. 2. You met with one of your close friends from primary school, Funda, last week. She told you that she really cannot understand why there are financial institutions. She tells you if she needs money her father lends her. Can you explain her why we need financial institutions? 3. Discuss 4 factors affecting quantity demanded for an asset. Next, explain how quantity demanded changes with an increase in each of these 4 factors. 4. Explain the relationship between yield-to-maturity and price of a bond?

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