Reference no: EM13321301

1. Explain why you would be more or less willing to buy gold under the following circumstances:

a. Gold again becomes acceptable as a medium of exchange.

b. Prices in the gold market become more volatile.

c. You expect inflation to rise, and gold prices tend to move with the aggregate price level.

d. You expect interest rates to rise.

2. Explain why you would be more or less willing to buy long-term Air Canada bonds under the following circumstances:

a. Trading in these bonds increases, making them easier to sell.

b. You expect a bear market in stocks (stock price sare expected to decline).

c. Brokerage commissions on stocks fall.

d. You expect interest rates to rise.

e. Brokerage commissions on bonds fall.

3. What would happen to the demand for Rembrandts if the stock market undergoes a boom? Why?