if you suspect that a company will go bankrupt next year, which would you rather hold, bonds issued by the company or equities issued by the company? why? 2. suppose that toyota sells yen-denominated bonds in new york. what type of debt instrument would that be? 3. how can the adverse selection problem explain why you are more likely to make a loan to a family member than to a stranger? 4. if there were no asymmetry in the information that a borrower and a lender had, could a moral hazard problem still exist? 5. in brazil, a country that underwent a rapid inflation before 1994, many transactions were conducted in dollars rather than in reals, the domestic currency. why? 6. was money a better store of value in the united states in the 1950s than in the 1970s? why or why not? in which period would you have been more willing to hold money? 7. go to the st. louis federal reserve fred database and find data on federal debt held by the federal reserve (fdhbfrbn), by private investors (fdhbpin), and by international and foreign investors (fdhbfin). using these series, calculate the total amount held and the percentage held in each of the three categories for the most recent quarter available. repeat for the first quarter of 2000, and compare the results. 8. go to the st. louis federal reserve fred database and find data on currency (currsl), demand deposits (demdepsl), and other liquid deposits (mdlm). calculate the m1 money supply, and calculate the percentage change in m1 and in each of the three components of m1 from the most recent month of data available to the same time one year prior. which component has the highest growth rate? the lowest growth rate?

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13-09-2022
Business

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if you suspect that a company will go bankrupt next year, which would you rather hold, bonds issued by the company or equities issued by the company? why? 2. suppose that toyota sells yen-denominated bonds in new york. what type of debt instrument would that be? 3. how can the adverse selection problem explain why you are more likely to make a loan to a family member than to a stranger? 4. if there were no asymmetry in the information that a borrower and a lender had, could a moral hazard problem still exist? 5. in brazil, a country that underwent a rapid inflation before 1994, many transactions were conducted in dollars rather than in reals, the domestic currency. why? 6. was money a better store of value in the united states in the 1950s than in the 1970s? why or why not? in which period would you have been more willing to hold money? 7. go to the st. louis federal reserve fred database and find data on federal debt held by the federal reserve (fdhbfrbn), by private investors (fdhbpin), and by international and foreign investors (fdhbfin). using these series, calculate the total amount held and the percentage held in each of the three categories for the most recent quarter available. repeat for the first quarter of 2000, and compare the results. 8. go to the st. louis federal reserve fred database and find data on currency (currsl), demand deposits (demdepsl), and other liquid deposits (mdlm). calculate the m1 money supply, and calculate the percentage change in m1 and in each of the three components of m1 from the most recent month of data available to the same time one year prior. which component has the highest growth rate? the lowest growth rate?

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tutorconsortium31 tutorconsortium31 · Answer 1 · 2022-09-15T13:13:47-04:00

You would rather hold bonds, because bondholders are paid off before equity holders, who are the residual claimants

What is debt instrument ?

A debt instrument is a piece of property that a person, company, or government can use to raise money or make money from investments. For instance, a business would need to finance the purchase of new equipment, whereas government organisations can need financing for initiatives like infrastructure upgrades or to support ongoing operations.

In essence, this kind of instrument serves as an IOU between the issuer and the buyer. By making a one-time lump sum payment to the issuer or borrower, the purchaser takes on the role of the lender.

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