Investors Who Believe That Interest Rates Will Rise Most Likely

question 18

Multiple Choice

investors who believe that interest rates will rise most likely prefer to invest in:

• A) inverse floaters.
• B) fixed-rate bonds.
• C) floating-rate notes.

---

Definitions:

Ambrosia

In Greek mythology, ambrosia is considered the food or drink of the gods, often depicted as conferring longevity or immortality upon whoever consumed it.

Fixed Coefficients

A term used in production and economics to describe technologies where inputs are used in strict fixed proportions to produce an output.

Production Possibility Set

A graph or curve depicting all maximum output possibilities for two or more goods, given a set of inputs.

Marginal Rate of Substitution

The rate at which a consumer is willing to give up one good in exchange for another, while keeping the overall satisfaction or utility constant.