金融市场与金融机构基础(第9章)英文版答案..docVIP

ANSWERS TO QUESTIONS FOR CHAPTER 9 (Questions are in bold print followed by answers.) 1. Your broker is recommending that you purchase U.S. government bonds. Here is the explanation: Listen, in these times of uncertainty, with many companies going bankrupt, it makes sense to play it safe and purchase long-term government bonds. They are issued by the U.S. government, so they are risk free. How would you respond to the broker? U.S. Government bonds may be free of default risk, but they are not free from interest rate risk, which may cause the bond price to decline, resulting in a capital