Lecture 5 The Micro-foundations of the Demand for Money - Part 2.
Section C – Managerial and individual decision problems Asymmetric information and risk – Main problems: adverse selection and moral hazard Applications.
1 Topic 1 (Ch. 6) Risk Aversion and Capital Allocation to Risky Assets Risk with simple prospects Investors view of risk Risk aversion and utility Trade-off.
Risk, Uncertainty, and Sensitivity Analysis How economics can help understand, analyze, and cope with limited information.
B ASIC T OOLS OF F INANCE ETP Economics 102 Jack Wu.
Chapter 4 Why Do Interest Rates Change?. Copyright © 2006 Pearson Addison-Wesley. All rights reserved. 4-2 Chapter Preview Although interest rates in.
Why Do Interest Rates Change? Chapter 4. Chapter Preview In the early 1950s, short-term Treasury bills were yielding about 1%. By 1981, the yields rose.
