Which One of the Following Is a True Statement Regarding

question 92

Multiple Choice

Which one of the following is a true statement regarding the components of the risk factor?

• A)When choosing an investment,it is not necessary to consider the risk factor.
• B)During inflationary times,there is no risk that the financial return on an investment will not keep pace with the rate of inflation.
• C)The interest rate risk associated with corporate bonds is the result of changes in the interest rates in the economy.
• D)The risk of business failure deals with changes in the value of stocks and bonds due to changes in interest rates in the market.
• E)The prices of stocks,bonds,and other investments never fluctuate in the market.

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Definitions:

Point A

Typically used in graphical analysis to denote a specific point or position within a chart or graph.

Economic Capacity

The maximum output that an economy can produce without big increases in inflation, utilizing fully its resources.

Investment Goods

Long-term assets purchased for the purpose of generating income, including machinery, buildings, and equipment.

Economic Growth

The uptick in the true economic value of goods and services made by an economy, accounting for inflation, as time progresses.