6. According to a 2005 paper by Bernanke and Kutter, when the Fed made surprise...
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6. According to a 2005 paper by Bernanke and Kutter, when the Fed made surprise changes to interest rates, on average: A) a rise in rates of 0.25 percent caused stock prices to fall about 1 percent. B) a cut in rates of 0.25 percent raised stock prices by 2.5 percent. C) had no effect on stock prices. D) None of the answers are correct. 7. A margin requirement: A) limits the amount an investor can spend on stocks. B) limits the amount a buyer can borrow to buy stocks C) limits the amount of stock a firm can issue. D) is the ratio of stocks to total assets held by an individual. 8. If Po is the initial price of the security, P is the price after you hold it for a year, and X represents a direct payment, an asset's rate of return is equal to: A) rate of return = (P1-P) B) rate of return = (P1-P) + X C) rate of return = (P1-Po) Po+X D) rate of return =(P1-P)/Po+X/Po 9. Everything else being the same, an increase in the price of a bond means that the yield to maturity A) decreases B) increases C) stays the same D) increases or decreases, depending on the face value of the bond 10. is the of a loan. In the loanable funds theory, A) the nominal interest rate; price B) inflation; cost C) the price; interest rate D) the real interest rate; price
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