Which of the following is true of interest-rate risk?
A. It refers to the probability that a borrower will default on debt obligations.
B. It is the risk that the coupon rate for a bond will change, affecting current bondholders' coupon payments.
C. Individuals owning long-term bonds are exposed to greater interest-rate risk.
D. It is the risk that the face value of a bond will change before maturity.
Answer: C
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A tariff
A) makes everyone worse off. B) makes domestic consumers better off. C) makes domestic producers better off. D) makes both domestic producers and consumers better off.
Which of the following is the best example of a command-and-control regulation?
a. Effluent taxes on pollutants. b. Emissions trading. c. Requiring automobiles to have catalytic converters. d. Offset programs.
The design of tax policy is one of the responsibilities of economists who work at the
a. Council of Economic Advisers. b. Federal Reserve. c. Department of the Treasury. d. Congressional Budget Office.
When a corporation issues a bond, it is
A. Lending money to the owners of the corporation. B. Issuing dividends to shareholders. C. Borrowing funds from the initial buyer of the bond. D. Making an initial public offering.