The Quantity Theory of Money Is Based on the Formula

question 212

Multiple Choice

The quantity theory of money is based on the formula that

• A)V = PY .
• B)Y = PV/ .
• C) = PV/Y.
• D)P = V/Y.

Calculate the current yield of a bond based on its market price and coupon rate.

Differentiate between real and nominal rates of return and understand how inflation affects these rates.

Understand the relationship between bond prices and market interest rates.

Calculate the number of bonds needed to be issued to raise a certain amount of money.

---

Definitions:

Financing Statement

A document prepared by a secured creditor and filed with the appropriate government official to give notice to the public that the creditor claims an interest in collateral belonging to the debtor named in the statement. The financing statement must contain the names and addresses of both the debtor and the creditor, and describe the collateral by type or item.

Trade Name

The name under which a business operates and is known to the public, distinct from the legal name of the business entity.

Perfection

The legal process by which secured parties protect themselves against the claims of third parties who may wish to have their debts satisfied out of the same collateral; usually accomplished by the filing of a financing statement with the appropriate government official.

Binding Agreement

A legally enforceable contract between parties that requires the fulfillment of certain obligations.