Which of the Following Are TRUE Concerning the Distinction Between

question 30

Multiple Choice

Which of the following are TRUE concerning the distinction between interest rates and returns?

• A)The rate of return on a bond will not necessarily equal the interest rate on that bond.
• B)The return can be expressed as the difference between the current yield and the rate of capital gains.
• C)The rate of return will be greater than the interest rate when the price of the bond falls during the holding period.
• D)The return can be expressed as the sum of the discount yield and the rate of capital gains.

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Definitions:

Total Product

The total quantity of output produced by a firm or economy as a result of its production process.

Marginal Product

The additional output that is produced by adding one more unit of a factor, such as labor or capital.

Bushels

A measure of volume that is used for quantities of grain, fruit, or other produce.

Variable Input

Variable input refers to a production factor that can be adjusted in the short term to increase or decrease production output.