Which of the Following Statements Is True

question 15

Multiple Choice

Which of the following statements is true?

• A) When establishing an investment program, you should begin by monitoring your investments.
• B) When you are choosing an investment, you should examine only the interest rate risk factor associated with each investment.
• C) When establishing an investment program, you should examine the potential return offered by different investment alternatives.
• D) Leave the financial planning to the professionals.
• E) There is no need to monitor your investments after you have made your investment decision.

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Definitions:

Market Interest Rate

The market interest rate is the rate of interest that is commonly charged or paid on loans and bonds in the current market.

Coupon Rate

The interest rate paid by a bond issuer on the bond's face value, determining the periodic interest payments to bondholders.

Semiannually

Occurring twice a year; typically refers to payments, interest calculations, or periods within a financial context.

Market Interest Rate

The prevailing rate of interest available in the marketplace on loans and deposits, influenced by various economic factors.