For the Average Individual Investor,the Gap Between the Short-Term Interest

question 24

Multiple Choice

For the average individual investor,the gap between the short-term interest rate at which he can borrow and the rate at which he could invest in long-term bonds is likely to be

• A) small or even negative, making the profitability of an interest -carry-trade strategy unlikely.
• B) small or even negative, making the profitability of an interest -carry-trade strategy likely.
• C) high, making the profitability of an interest -carry-trade strategy unlikely.
• D) high, making the profitability of an interest -carry-trade strategy likely.

---

Definitions:

Industry Size

The overall scale or breadth of a sector, often measured by the number of firms, employees, or the volume of production.

Profits And Losses

The financial gains earned or losses incurred by a business over a specified period.

Economic Model

A simplified representation of economic processes, used to predict and analyze real-world economic behaviors.

Consumer Tastes

Preferences and inclinations of consumers regarding various goods and services, which can influence their purchasing decisions.