1)
A) incorrect.liquidity premium is subject to be calculated for taxation.

B) incorrect.default risk is the amount calculated by the rate of return of an asset at price-rate of return of a risk free asset.

C) incorrect.CAMELS rating does not include the Liquidity premium.

D)correct.other factors remained constant,if the interest rate of a long term bond is high then the Liquidity risk will also be high.

2)
A)change in discount rate occurs due to demand.when customers demand more loans from banks,more investment then Interest rates are low.now this demand affects the interest rates.

B)money supply increases with the customers with the increase in discount rates.hence to control this supply the discount rates are increased.

C) Correct.change in discount rates affect both demand and supply curves.

D) incorrect.

3)
A) correct.Milton Friedman was most associated economist with monetarism.he was an American economist.he won noble prize for economics in 1976.

B) incorrect
C) incorrect
D) incorrect

4)
A) incorrect
B) correct.the great inflation gave its birth from 1964.it was at its full fledged form in 1970s.
C) incorrect
D) incorrect

5)
A) correct.it was founded in 1847.it was 4th largest investment bank with more than 25000 employees,untill bankruptcy was filled in 2008.
B) incorrect
C) incorrect
D) incorrect.