Explain (in no more than two paragraphs for each) which of the
following statements are true or false.
A. The traditional liquidity premium theory states that
long-term interest rates are greater than the average of current
and expected future short-term interest rates
.B. According to the market segmentation theory, short-term
investors will not normally switch to intermediate- or long-term
investments.
C. According to the liquidity premium theory, investors
preferring long-term bonds over short-term bonds would require
lower liquidity premium.
4) Explain (in no more than two paragraphs for each) which of
the following statements are true or false.
A. Suppose two bonds of equivalent risk and maturity have
different prices such that one is a premium bond and one is a
discount bond. The premium bond must have a greater expected return
than the discount bond.
B. All else equal, the holder of a fairly priced premium bond
must expect a capital loss over the holding period.
C. The...
QUESTION ONE. Write short notes on each of the following
international trade theories (two marks each):
• • Mercantilism
• • Absolute Advantage
• • Comparative Advantage
• • Heckscher – Ohlin
• • New trade theory
Write short notes on the following concepts;
Property right
Concave function
Diminishing marginal rate of substitution
Mixed strategy
Contract curve
Marginal physical products.
Write short notes (aided by diagrams) on the following:
i) The effect of hybridization on bond lengths
ii) Naphthalene as an environmental pollutant
iii) The stability of the benzene ring
please write in 2 paragraphs for each concepts.. " The yo-yo
works on two principles, (i) conservation of energy and (ii) Torque
equals the product of Mass moment of Inertia of the disk in yo-yo
toy and it's angular acceleration".
Write short notes on the following concepts:
Adverse selection
Asymmetric information
Expenditure function
Externality
Prisoners’ dilemma
Property rights
Public good
Write short notes on the following concepts
Return on investments
Re-purchase agreement
Salvage value
Secondary issue
Secondary market
Accrued interest
Acid-ratio-test