Use the Following Two Statements to Answer This Question: I

question 4

Multiple Choice

Use the following two statements to answer this question: I. In order to answer normative questions, it is necessary to make value judgments.
II) In order to conduct positive economic analysis, it is always necessary to use empirical evidence in addition to economic theories.

• A) I and II are incorrect.
• B) I is correct, II is incorrect.
• C) I is incorrect, II is correct.
• D) Both I and II are correct.

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Definitions:

Equivalent Annual Payment Bond

A type of bond that pays annual interest payments, calculated to provide a return equivalent to other periodic payment schedules.

EAR

Effective Annual Rate, a measure of interest that takes into account the effects of compounding over a year.

Conversion Value

The financial worth of converting a convertible security, like a bond, into a set number of shares of the issuing company.

U.S. Treasury Note

A marketable U.S. government debt security with a fixed interest rate and a maturity between one and ten years.