ECON 2035- Midterm Exam Guide - Comprehensive Notes for the exam ( 63 pages long!)
Document Summary
Chapter 5 book notes to alternative assets alternative assets alternative assets: money, bond, stock, art, land, house, farm equip. , manu. machinery. But if bus company has fixed return of. 10%, most risk-adverse people will choose a bus. Theory of portfolio choice: the more liquid an asset i relative to alternative assets, holding everything else unchanged, the more desirable it is and the greater quantity demanded will be [house not liquid. Us treasury bill market w/ buyers, sold quick: theory of portfolio choice theory that outlines how much of an asset people will want to hold in their portfolios, as determined by wealth, expected returns, risk, and liquidity. Response of the quantity of an asset demanded to changes in: Change in quantity demanded: only increases are show, decreases would make the right column opposite. I = interest rate = yield to maturity. Supply & demand analysis: price & interest rate on vertical axis.
