Which One of the Following Statements Is True

question 74

Multiple Choice

Which one of the following statements is true?

• A)The interest risk premium always adds a downward bias to the slope of the yield curve.
• B)The longer the maturity of a security,the greater its interest rate risk.
• C)If investors believe inflation will be subsiding in the future,the prevailing yield will be upward sloping.
• D)The real rate of interest varies with the business cycle,with the lowest rates seen at the end of a period of business expansion and the lowest at the bottom of a recession.

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Definitions:

Contribution Margin

The difference between sales revenue and variable costs, measuring the ability of a business to cover its fixed costs.

Sales Mix

Sales mix is the proportion of different products or services that a company sells, reflecting the variety of sales contributing to total revenue.

Units Sold

The total quantity of products or goods sold by a company during a specific period.

Relevant Range

The scope of activity levels within which the assumptions about fixed and variable costs in cost-volume-profit analysis remain valid.