3. (12 分) Using both the liquidity preference framework and the supply and demand for bonds framework, show why interest rates are procyclical (rising when the econony is expanding and falling during recessions).

a. If you are risk-neutral (that is, neither seck out nor shy away from risk), which of the four options should you choose to maximize your expected return? (Hint: To calculate the expected return of an outcome, multiply the probability that an event will occur by the outcome of that event and then add them up.) (8 分)

3. (12 分) Using both the liquidity preference framework and the supply and demand for bonds framework, show why interest rates are procyclical (rising when the econony is expanding and falling during recessions).

相關申論題

相關試卷