A nation's market-risk premium rises if:
a. The volatility (e.g., standard deviation) of expected inflation rises.
b. The average expected inflation rate rises.
c. Security maturities lengthen.
d. All of the above.
.A
You might also like to view...
In the above figure, which of the figures shows a relationship between x and y with a negative slope?
A) Figure A B) Figure B C) Figure C D) Figure D E) Both Figure A and Figure B
Stockholders normally obtain higher expected payments than bondholders because
A. they are required by law to obtain a higher return. B. they face higher risk. C. the profit share declared as stock dividends is not taxable. D. they vote themselves higher returns.
The marginal social benefit is the:
A. benefit gained by the last user. B. sum of the marginal benefit gained by each individual user. C. total benefit gained by the last user. D. sum of the benefit gained by each individual user.
Suppose the currency price of the U.S. dollar in terms of the Japanese yen starts to fall. To prevent that from occurring, the U.S. central bank should
A) use U.S. dollars to buy Japanese goods. B) use yen reserves to buy U.S. dollars in the foreign exchange market. C) sell U.S. dollars in the foreign exchange market in exchange for yen. D) buy both U.S. dollars and yen in the foreign exchange market.