1. Which of the following contributes to the DEMAND for bonds? Total asset risk Production opportunities...

1. Which of the following contributes to the DEMAND for bonds?

Total asset risk

Production opportunities

Expected inflation

Time preference of consumption

2. Investors make choices of which assets to use for savings based on which two factors.

expected inflation and the asset’s risk characteristics

risk aversion and expected inflation

risk aversion and the asset’s risk characteristics

expected inflation and investment horizon

3. The MORE risk-averse an investor is the __________ she will pay for a risky asset and the _________ the required expected return on the asset will be.

more; greater

less; lower

less; greater

more; lower

Expert Solution

jeff jeffy answered 2 years ago

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