If Interest Rates Increase, 1

question 10

Multiple Choice

If interest rates increase, 1. the price of a Ginnie Mae falls
2) the price of a Ginnie Mae rises
3) the speed with which Ginnie Maes are
Retired increases
4) the speed with which Ginnie Maes are
Retired declines

• A) 1 and 3
• B) 1 and 4
• C) 2 and 3
• D) 2 and 4

---

Definitions:

Expected Profit

The forecasted amount of profit that a business or investment is projected to earn over a specific period.

Japanese Yen

The official currency of Japan, often represented by the symbol ¥.

Risk Averse

A risk-averse individual prefers certainty over uncertainty and would opt for a guaranteed outcome over a gamble with potentially higher, yet uncertain, rewards.

Expected Rate

Often refers to the anticipated rate of return on an investment or the expected growth rate of an economic variable.