[金融学原理英文第五单元课后答案.doc

CHAPTER 5 ANSWERS The return associated with any investment is based on the change in the investor’s wealth. Any income (interest or dividend) received by the investor changes his or her wealth. In addition, if the investor sells the investment for a price that differs from what was originally paid, wealth is affected. As a result, an investor’s change in wealth (return on an investment) is measured by both the income received from the investment and the change in value of the investment. 5-2 Regional mortgage rate differentials do exist, depending on supply/demand conditions in the different regions. However, relatively high rates in one region would attract capital from other regions, and the end result would be a differential that was just sufficient to cover the costs of effecting the transfer (perhaps ? of one percentage point). Differentials are more likely in the residential mortgage market than the business loan market, and not at all likely for the large, nationwide firms, which will do their borrowing in the lowest-cost money centers and thereby quickly equalize rates for large corporate loans. 5-3 Short-term rates are more volatile because (1) the Federal Reserve operates mainly in the short-term sector, hence intervention has its major effect here, and (2) long-term rates reflect the average expected inflation rate over the next 20 to 30 years, and this average does not change as radically as year-to-year expectations. 5-4 A significant increase in productivity would raise the rate of return on producers investments, thus causing the investment curve (see Figure 5-1 in the textbook) to shift to the right. This would increase the amount of savings and investment in the economy, thus causing all interest rates to rise. 5-5 a. The immediate effect on the yield curve would be to lower interest rates in the short-term end of the market, because the Fed deals primarily in that market segment. However, people would expect higher future inflation, w