Considering the Value of a Financial Instrument, the More Likely

question 97

Multiple Choice

Considering the value of a financial instrument, the more likely it is the payment will be made:

• A) the more valuable the financial instrument.
• B) the less valuable is the instrument because risk is lower.
• C) the less valuable is the financial instrument because it is highly liquid.
• D) the greater the uncertainty; therefore the less valuable is the financial instrument.

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Definitions:

Boom

A period of significant economic growth, expansion, and increased productivity, often characterized by high demand, low unemployment, and rising prices.

Full Employment

An economic situation where all available labor resources are being used in the most efficient way possible, typically characterized by the absence of cyclical unemployment.

Cyclical Unemployment

Unemployment that rises during economic downturns and falls when the economy improves.

Seasonal Unemployment

Joblessness linked to seasonal variations in demand or supply of labor in certain industries.