Question: Short Answer Questions (10 points each, 40 points total) orf answer questions usualy require a one-paragraph response (5or sentences). Write your responses below and on
Short Answer Questions (10 points each, 40 points total) orf answer questions usualy require a one-paragraph response (5or sentences). Write your responses below and on page3. 1. Describe how risk aversion affects a stock's re quired rate of return. Discuss the basics of loan amortization and describe a loan amortization schedule that you might use when considering an auto loan or home mortgage loan. Explain what the yield curve is, what determines its shape, and how you can use the yield curve to help forecast future interest rates. 3. Discuss how bond prices are determined in the market, what the relationship is between interest rates and bond prices, and how a bond's price changes over time as it approaches maturity. 4. Short Answer Questions (10 points each, 40 points total) orf answer questions usualy require a one-paragraph response (5or sentences). Write your responses below and on page3. 1. Describe how risk aversion affects a stock's re quired rate of return. Discuss the basics of loan amortization and describe a loan amortization schedule that you might use when considering an auto loan or home mortgage loan. Explain what the yield curve is, what determines its shape, and how you can use the yield curve to help forecast future interest rates. 3. Discuss how bond prices are determined in the market, what the relationship is between interest rates and bond prices, and how a bond's price changes over time as it approaches maturity. 4
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