The Risk Structure of Interest Rates Refers to

question 54

Multiple Choice

The risk structure of interest rates refers to

• A)the amount of additional interest necessary to compensate savers for the greater risk of default on some bonds.
• B)the relationship among the interest rates on similar bonds with different maturities.
• C)the relationship among the interest rates on bonds with the same maturity.
• D)the amount of additional interest necessary to compensate savers for the lesser liquidity of some bonds.

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Definitions:

Elastic Portion

The elastic portion of a demand or supply curve represents the range where the quantity demanded or supplied responds significantly to changes in price.

Revenue Curves

Graphical representations showing the relationship between different levels of output or sales and the total revenue earned by a company.

Inelastic

Describing demand or supply that is relatively unresponsive to changes in price, meaning the quantity demanded or supplied changes by a smaller percentage than the change in price.

Output Level

The quantity of goods or services produced by a business or economy during a specific period.