4.1

Financial Assets

AP Macroeconomics

Types of Financial Assets

Bonds in Detail

Example Bond

Who Issues Bonds?

The Bond Price – Interest Rate Relationship

Why Are They Inversely Related?

Intuition

How Open Market Operations Work Through Bonds

Step-by-step: Fed Buys Bonds

Step-by-step: Fed Sells Bonds

Stocks vs. Bonds

Risk and Return Trade-off

Liquidity Spectrum

Present Value (Conceptual)

AP Exam Tips

Common Mistakes