Eco 4223 exam - Study guides, Class notes & Summaries

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ECO 4223 Money & Banking Exam 2; Questions and Answers 100% Solved Risk Structure of Interest rate The relationship among the various interest rates on bonds with the same term to maturity. e.g: A 10yr bond from Coca Cola vs. a 10yr bond from ABC Inc. Factors include: Default Risk; Liquidity; Taxes Default Risk The risk that the issuer may not be able to honor a bond. The issuer can not make interest payments or pay face value at maturity Risk Premium The difference between investment...

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