Keynes examined three (3) motives for demanders of money. Illustrate out these motives clearly.
Make a distinction between an operating lease and a finance lease.
Assume that rate of interest is 10% and you’re offered either a discount bond paying you $5,000 in 5 years or a fixed-payment loan paying you $750 per year for five consecutive years.
Both discount bond and fixed payment loan costs a price of $3,000 today. As a rationale investor, which must you buy: the discount bond or the fixed-payment loan? Justify your decision.
Make a distinction between Pure Risks and Speculative Risks.
Illustrate out the characteristics of money markets and give five (5) instances of money market instruments.