+1 862 207 3288 1. How are the values of financial assets affected by changes in interest rates?
2. Suppose you believe that the economy is just entering a recession. Your firm must raise capital immediately using debt (bonds). Should you borrow on a long-term or a short-term basis? Why?
3. Suppose it is now January 1, 2008, and you just sold an investment that you own for $12,500. You purchased the investment four years ago for $10,500. During the time you held the investment, it paid income equal 21,000 each year. What is the four-year holding period yield that you earned on your investment?
