Refer to Figure 4.7. You will receive a payoff of +5 points if you ask for points and so do ________ of your classmates

When interest rates fall, a bank that perfectly hedges its portfolio of Treasury securities in the futures market

A) suffers a loss. B) experiences a gain. C) has no change in its income. D) may either gain, lose or see no change in its income.

In the U.S., from the early 1980s through the early 1990s,

a. both inflation and nominal interest rates rose. b. both inflation and nominal interest rates fell. c. the inflation rate fell and the nominal interest rate rose. d. the inflation rate rose and the nominal interest rate fell.