An Increase in Which One of These Is Most Apt

question 67

Multiple Choice

An increase in which one of these is most apt to decrease the nominal interest rate?

• A)Liquidity
• B)Interest rate risk
• C)Default risk
• D)Expected future inflation
• E)The relevant tax rate

---

Definitions:

80% Test

A requirement or threshold in various contexts where at least 80% of some criteria must be met, but in finance, it often relates to rules around shareholder voting rights or dividend distribution policies.

Recognize Gain

To report and potentially pay taxes on profits from the sale of an asset when the selling price exceeds the asset's adjusted basis.

Stockholder

An individual or entity that owns shares in a corporation, thus holding a portion of the company's ownership.

Dividends Received Deduction

A tax deduction available to corporations that receive dividends from related entities, aimed at mitigating the effects of multiple layers of taxation.