Which of the Following Bond Mutual Funds Has Both the Lowest

question 21

Multiple Choice

Which of the following bond mutual funds has both the lowest default risk and the lowest interest rate risk?

• A) Short-term Treasury
• B) Long-term Ginnie Mae
• C) Long-term corporate
• D) Short-term high yield

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Definitions:

Average Variable Cost

The total variable costs (costs that change with output level) divided by the quantity of output produced.

AVC

Average Variable Cost; the cost of variable inputs divided by the quantity of output produced.

AFC

Average Fixed Cost, which is the fixed costs of production divided by the quantity of output produced.

MC

Marginal Cost, the change in total cost that arises when the quantity produced is incremented by one unit.