What does the liquidity preference expectations theory

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Problem 1 Assuming underlying Treasury rates are unchanged, how would an increase in the market's expectation of default for a particular bond impact its market price and OAS?

Problem 2 Why is using OAS and Spot Rates better than using the Spread to YTM method to value risky bonds?

Problem 3 What does the Liquidity Preference Expectations Theory imply about the relationship between Expected Future Spot Rates and Forward Rates?

Problem 4 What mechanism does the Fed currently use to increase or decrease the Fed Funds Rate?

Attachment:- Treasury note..zip

Reference no: EM132742377

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