1. Explain how a bank’s credit risk and interest rate risk can affect its liquidity risk.
2. A bond is selling for $1,050 at the present time. Would the coupon rate on this bond be greater than, or less than, a 4% market interest if the bond has 20 years until maturity?
3. In January 2007, the average price of an asset was $27,258. 8 years earlier, the average price was $22,308. What was the annual increase in selling price?