The Bond Market Is Important Because

question 36

Multiple Choice

The bond market is important because

• A)it is the major source of borrowed funds for U.S. business.
• B)it provides a rate of return significantly greater than the stock market.
• C)it provides foreign purchasers of U.S. products a means to exchange their currencies for U.S. dollars.
• D)it provides a way for businesses and governments to borrow funds from savers and it is the market that determines interest rates.

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Definitions:

Efficiency Of Investment

The degree to which invested resources are used optimally to achieve desired outcomes without waste.

Beneficiary

An individual or entity entitled to receive benefits or profits from a will, trust, insurance policy, or other arrangements designed to distribute assets.

Economic Profit

The profit a company makes after deducting both its explicit (direct) and implicit (indirect) costs.

Allocation Of Resources

The process by which resources are distributed for the production of goods and services, usually determined by market forces in a free market, or by government decisions in a planned economy.