How are Treasury bills sold? How do competitive and noncompetitive bids differ?
Why is it so important for an economy to have fully developed financial markets?
What is the free-rider problem? Describe some situations that this problem creates.
If investors perceive greater interest rate risk, what will happen to the equilibrium interest rate in the bond market? Explain using the bond demand and supply framework.
What are some of the differences between an organized exchange and an over-the-counter market?
Distinguish between money markets and capital markets.
Explain why money market interest rates move so closely together over time.
Explain the features of mortgage loans that are designed to reduce the likelihood of default.Explain the features of mortgage loans that are designed to reduce the likelihood of default.