All of the Following Are Associated with Contagious Runs Except

question 55

Multiple Choice

All of the following are associated with contagious runs except:

• A)liability holders not distinguishing between good and bad FIs
• B)liability holders seeking to quickly turn their liabilities into cash or safe securities
• C)a contractionary effect on the supply of credit and negative social welfare effects
• D)an expansionary effect on the money supply

---

Definitions:

Market Price

The ongoing financial rate for purchasing or selling an asset or service.

Par Value

The face value of a bond or the stock value stated in the corporate charter, not necessarily reflecting the market value.

Coupon Bond

A type of bond that offers periodic interest payments to its holder, typically paid semi-annually, until maturity.

Duration

Duration is a measure of the sensitivity of the price of a financial asset to a change in interest rates, often used in the context of bonds to describe how price is affected by changes in rates.