Why are the securities and more marketable than loans in the secondary market?

Please just answer the following questions direct as possible without the use of to much extra fluff……if u knw wht i mean.

1.Explain the meaning of efficient markets. Why might we expect them to be efficient most of the time? In recent years, several securities firms have been guilty of using inside information when purchasing securities, thereby achieving returns well above the norm (even when accounting for risk). Does this suggest that the security markets are not efficient? Explain.

2.Commercial banks use some funds to purchase securities and other funds to make loans. Why are the securities and more marketable than loans in the secondary market?

3.What is the function of a mutual fund? Why are mutual funds popular among investors? How does a money market mutual fund differ from a stock or bond mutual fund?

4.Explain why interest rates tend to decrease during recessionary periods. Review historical interest rates to determine how they reacted to recessionary periods. Explains this reaction.

5.Should increasing money supply growth place upward or downward pressure on interest rates?

6.Suppose the real interest rate is 6 percent and the expected inflation is 2 percent. What would you expect the nominal rate to be?

7.Suppose that Treasury bills are currently paying 9 percent and the expected inflation is 3 percent. What is the real interest rate?

8.A) Assume that as of today, the annualized two year interest rate is 13 percent, while the one year interest rate is 12 percent. Use only this information to estimate the one year forward rate.

B) Assume that the liquidity premium on a two year security is 0.3 percent. Use this information to reestimate the one year forward rate.

9.A) A corporation is planning to sell its 90-day commercial paper to investors offering an 8.4 percent yield. If the three month T-bill’s annualized rate is 7 percent, the default risk premium is estimated to be 0.6 percent, and there is a 0.4 percent tax adjustment, what is the appropriate liquidity premium?

B) If due to unexpected changes in the economy the default risk premium increases to 0.8 percent, what is the appropriate yield to be offered on the commercial paper (assuming no other changes occur)?

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