The United States Is a Net Recipient of Foreign Savings

question 110

Multiple Choice

The United States is a net recipient of foreign savings.

• A) This has never happened before.
• B) This is bad because we are borrowing money from overseas.
• C) This is bad because we are losing control over our own destiny.
• D) This has been true throughout much of our history.

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Definitions:

Price Volatility

The rate at which the price of a security increases or decreases for a given set of returns, indicative of the risk or uncertainty of the security's value over time.

Reinvestment Risk

The risk of earning less interest or dividends from future investments when existing bonds, stocks, or other income-generating assets mature or are sold.

Macaulay Duration

A measure of the weighted average time until a bond's cash flows are repaid, used in assessing interest rate risk.

Future Value

The value of an asset or cash at a specified date in the future that is equivalent in value to a specified sum today, taking into account various factors like interest or returns.