The Best Way for an Investor to "Lock In" to High

question 18

Multiple Choice

The best way for an investor to "lock in" to high interest rates would be to purchase a bond that has a ____ coupon and a ____ term to maturity.

• A) Low, short
• B) Low, long
• C) High, short
• D) High, long
• E) Zero, very long

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Definitions:

Short Run

A period in which at least one input in the production process is fixed, limiting the ability to adjust the production level.

Short Run

A period in economics during which some factors of production or inputs are fixed, influencing decisions on production and costs.

Fixed Costs

Costs that do not vary with the level of production or sales and must be paid regardless of the quantity produced or sold.

Farm

An area of land and its buildings, used for growing crops and raising animals.