Unit 6
When investors tend to increase their investments in debt securities on the short end of the spectrum it generally leads to
positive yield curve
Proponents of the concept of inflation inertia believe that
prices will rise slowly and then begin to increase at a faster rate
With respect to the fiscal policy of the US, the annual budget request is submitted by the
President
Some prominent stock market pundits are predicting that the economy will slide into a recession in the near future. Furthermore they are expecting moderate deflation during the same period. If this were to happen, your clients would probably enjoy the greatest overall return from investing in
US treasury bonds
A fixed income investor notices that the short, intermediate, and long ends of the yield curve reflect a similar return. This would be typical of
A flat yield curve
An investor using yield curve analysis would expect to view bonds of
A single issuer over varying maturities
The research department of an investment advisory firm forecasts that the current business cycle should reach its peak within the next two months. Under such circumstances which of the following portfolio adjustments would be most suitable for the firms customers who actively invest in common stocks
Defensive stocks
When the value of the US dollar decreases
Domestic manufacturers will likely increase their exports
To stimulate a sluggish economy using fiscal policy measures policymakers would
Reduce income taxes
All of the following are tools that may be employed by the federal reserve in an effort to control the economy EXCEPT
The prime rate
A recession is defined as a drop in GDP for
Two consecutive quarters
A decrease in the value of the monetary unit is just a way of defining
inflation
