Under the Preferred Habitat Theory the Shape of the Yield

question 7

Multiple Choice

Under the preferred habitat theory the shape of the yield curve depends on

• A)the relative return of investments in common stocks versus investments in corporate bonds.
• B)the size of the federal government's budget deficit.
• C)government tax treatment of long-term versus short-term bonds.
• D)the expected pattern of future short-term rates and the size of the term premium at each maturity.

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Definitions:

Operations Management

The administration of business practices to create the highest level of efficiency possible within an organization, focusing on converting materials and labor into goods and services as efficiently as possible.

Scheduling Chart

A visual tool used to plan and display the timeline of tasks and activities in a project or process.

Continuous Process

An ongoing operation or production method without interruption or end points.

Product Quality

The characteristics of a product or service that bear on its ability to satisfy stated or implied customer needs.