Respond to the following questions thoroughly, in 150-300 words for each question. Use your textbook Financial and Institutions Eighth Edition authors - Frederic S. Mishkin and Stanley G. Eakins as your first and major reference.
- In what ways are the financial markets and financial intermediaries important, in terms of the aggregate economy?
- What is the difference between a conventional bond and a zero coupon bond? Why would an investor choose one over the other?
- What is meant by the statement that people and institutions are risk averse? Why do people invest in assets that are more risky than the average investment?