Which of the Following Is TRUE

question 106

Multiple Choice

Which of the following is TRUE?

• A)A bond's price moves to par value as it approaches maturity.
• B)Bond ratings measure the maturity risk associated with a given bond.
• C)Bonds are referred to as amortized debt due to the fact that interest and principal payments are made to the lender until maturity.
• D)Both a & b

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Definitions:

Units

The basic quantity or measurement, such as meter, kilogram, or liter, in terms of which something is considered or measured.

Quasilinear Utility Functions

Utility functions where consumers' utility is linear in one argument, typically representing money, allowing for easy analysis of changes in wealth.

Edgeworth Box

An Edgeworth Box is a visual representation used in microeconomics to show the distribution of resources or the optimal allocation between two individuals, demonstrating how both can benefit through trade.

Pareto Optimal Allocations

A condition of resource allocation where it's impossible to make any one individual better off without making at least one individual worse off, emphasizing the concept of efficiency in economic distribution without losses.