If you were the new investor who was just beginning to

Reference no: EM13394435

By 2012, actions by the Federal Reserve and other central banks had driven short-term interest rates close to zero. One portfolio manager was quoted as saying: "The market has heard... central bankers and has responded accordingly".

a. In what ways did individual investors respond to very low short-term interest rates?

b. If you owned a portfolio of long-term bonds in 2007, before the beginning of the financial crisis, would the return on you portfolio have been helped or hurt by the fall in the short-term interest rates? Explain

c. If you were a new investor who was just beginning to build an investment portfolio, would your investment opportunities have been helped or hurt by the decline in interest rates? Explain

Reference no: EM13394435

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