Which of the Following Best Explains Why the Long-Term Interest

question 18

Multiple Choice

Which of the following best explains why the long-term interest rate will generally change by less than 1% when the short-term interest rate changes by 1%?

• A)The mathematical calculations are more difficult for analysts in the case of long-term bonds.
• B)Long-term rates are always lower than short-term rates, so there is less room for them to change.
• C)Financial market participants will not expect this increase in the short-term interest rate to persist fully in the future.
• D)Financial markets are often affected by bubbles and fads.
• E) none of the above

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Definitions:

Infection control

Measures and procedures used to prevent the spread of infectious diseases in healthcare and community settings.

Indoor pollution

Indoor pollution refers to the presence of pollutants within and around buildings and structures, primarily affecting the quality of indoor air.

Mosquito nets

A mesh fabric used to prevent mosquitoes from entering a space, reducing the risk of mosquito-borne diseases.

Handwashing

The act of cleaning hands with soap and water or hand sanitizer to remove dirt, germs, and other contaminants.