Supporters of ISI Believed That Prices of _____ Were _____

question 6

Multiple Choice

Supporters of ISI believed that prices of _____ were _____ relative to the price of manufactures over the long run.

• A) commodities, increasing
• B) commodities, decreasing
• C) commodities, remaining the same
• D) services, increasing
• E) services, decreasing

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Definitions:

Risk-Free Rate

The rate of return on an investment with no risk of financial loss, typically associated with government bonds.

Oil Futures

Contracts to buy or sell oil at a predetermined price on a specified future date, used as a financial instrument for hedging or speculative purposes.

Risk-Free Rate

This rate is considered the minimum return investors expect for any investment, since they would not take on additional risk without the prospect of higher returns, often pegged to government-issued securities.

Convergence Play

An investment strategy that exploits the price difference between two or more markets or securities with the expectation that their prices will eventually converge.