Which of the Following Is an Overstated Question

question 66

Multiple Choice

Which of the following is an overstated question?

• A) How much would you pay for sunglasses that will protect your eyes?
• B) How much would you pay for shoes with a cushioning gel in them?
• C) How much would you pay for a child's swimsuit that had a built-in flotation device?
• D) How much do you think you would pay for a car with features that would save your life and possibly the lives of your family members, if you were in a car accident?
• E) How much would you pay for a PDA that also provided Internet access?

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Definitions:

Yield To Maturity

The total return anticipated on a bond if it is held until the date it matures, including all payments of principal and interest.

Immunization

A strategy that matches durations of assets and liabilities so as to make net worth unaffected by interest rate movements.

Interest-Rate Risk

The potential for investment losses due to fluctuations in interest rates, affecting particularly fixed-income securities.

Default Risk

The possibility that a borrower will fail to meet the obligations of a debt agreement.