Three Factors That Cause Interest Rates Among Different Financial Instruments

question 11

Multiple Choice

Three factors that cause interest rates among different financial instruments to vary are

• A)default risk, expected inflation, and taxability.
• B)default risk, current inflation, and taxability.
• C)default risk, maturity, and taxability.
• D)default risk, expected inflation, and maturity.

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Definitions:

Positions

The roles, stances, or locations individuals or groups occupy within social, cultural, or political contexts.

Functional Explanation

An approach that explains social phenomena in terms of the functions they serve for a society or an organism.

Prestige

Social esteem, regard, or respect accorded by members of a society to individuals, jobs, or items based on perceived quality or merit.

Motivations

The reasons or forces that drive individuals to take certain actions or behave in specific ways.