If a Security Is Sold at a Lower Yield Than

question 61

Multiple Choice

If a security is sold at a lower yield than that at which it was purchased, the holder:

• A) incurs no capital gain or loss.
• B) makes a capital gain.
• C) makes a capital loss.
• D) It depends on the length of time remaining until maturity.

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Definitions:

Stereotypes

Oversimplified and widely held beliefs about the characteristics of groups of people that can influence individual behavior and expectations.

Lie-Detector Test

A method that attempts to determine if someone is lying by measuring physiological responses such as blood pressure, pulse, and perspiration.

Base-Rate Information

Statistical information that indicates how common a particular trait, behavior, or characteristic is within a given population or context.

Availability Heuristic

A cognitive bias that causes people to overestimate the importance of information that is readily available to them.