The Price Effect and the Reinvestment Effect Are Both Sources

question 5

Multiple Choice

The price effect and the reinvestment effect are both sources of:

• A)default risk.
• B)term structure.
• C)interest rate risk.
• D)default risk structure.

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Definitions:

Price

The monetary value attached to the purchase of a good or service.

Quantity

The quantity of a tangible or intangible product or service.

Curve Shift

A movement of the supply or demand curve to the left or right, indicating a change in the market conditions.

Movement Along

Changes in the quantity demanded or supplied resulting from a change in price, illustrated by a movement along a demand or supply curve.