Which of the Following Types of Debt Securities Protect Investors

question 16

Multiple Choice

Which of the following types of debt securities protect investors against interest rate risk?

• A) floating rate bonds
• B) extendible notes
• C) original issue deep discount bonds
• D) floating rate bonds and extendible notes

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Definitions:

Average Revenue

The amount of income generated per unit of sale, calculated by dividing total revenue by the quantity of goods sold.

Marginal Revenue

The additional income obtained from selling one more unit of a product or service.

Deadweight Loss

A loss of economic efficiency that can occur when the equilibrium for a good or a service is not achieved or is unachievable.

Socially Efficient

A situation where resources are allocated in a way that maximizes the total benefit to society.