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Which of the Following Statements Is True About the U

question 119

Multiple Choice

Which of the following statements is true about the U.S. national debt?
I. Relative to the level of economic activity, the debt is well below the levels reached during
World War II.
II. The ratio of debt to GDP rose from 1981 to 1996 and fell in the last years of the twentieth
Century; it began rising again in 2002.
III. Judged by international standards, the U.S. national debt relative to its GDP is above average among developed nations.


Definitions:

Coupon

The interest rate stated on a bond when issued, which is typically paid at regular intervals until maturity.

Target Date Immunization

A strategy used in fixed-income portfolio management where the portfolio is structured to become immune to interest rate changes as it reaches a specified date.

Horizon Analysis

A method used in finance to evaluate investments by forecasting their returns or performance over a specific future period.

Yield Curve

A graph that shows the relationship between interest rates and the time to maturity of debt for a given borrower in a given currency.

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