John Has Bought into a Mutual Fund That Includes Long-Term

question 116

Multiple Choice

John has bought into a mutual fund that includes long-term municipal bonds, corporate bonds, and common stocks with good dividend-paying records. This mutual fund is emphasizing

• A) stability.
• B) safety.
• C) high current income.
• D) aggressive growth.
• E) growth.

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Definitions:

Relative Purchasing Power

A concept that compares the ability of entities to buy the same goods or services with a specific amount of currency in different environments or time periods.

Parity

In finance, parity refers to the equality of two or more securities, rates, or related financial instruments in terms of price or value.

Absolute Purchasing Power Parity

A theory that suggests that prices of goods and services should equalize across countries over time when measured in a common currency, due to exchange rate changes.

Silver

A precious metal used for currency, jewelry, and industrial applications.