Necessity Assets Are Assets

question 14

Multiple Choice

Necessity assets are assets

• A)with wealth elasticities of less than 1.
• B)with wealth elasticities of greater than 1.
• C)held by savers for investment.
• D)not subject to federal income tax.

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Definitions:

Coupon Bond

A bond that offers interest payments to its holder at fixed intervals until maturity, at which point the principal amount is repaid.

Market Return

Market return refers to the total return on investment from a market index, which includes dividend payments and capital gains or losses.

Interest Semiannually

The payment of interest two times per year on a loan or bond.

Bond Covenant

Legal agreements between bond issuers and bondholders that specify terms and conditions to protect the interests of both parties.