The Rate of Return on Which One of the Following

question 60

Multiple Choice

The rate of return on which one of the following is used as the risk-free rate?

• A)Long-term government bonds
• B)Long-term corporate bonds
• C)Inflation, as measured by the Consumer Price Index
• D)U.S. Treasury bill
• E)Large-company stocks

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Definitions:

Incentive

Something that induces a person to act

Empirical Work

Research that relies on actual experience or observation rather than theory or pure logic, often involving the collection and analysis of data.

Productivity

An indicator of production effectiveness, typically shown as the proportion of outputs versus inputs in the manufacturing process.

Wage Differentials

The variation in pay rates between different sectors, roles, or geographical locations, often influenced by skill levels, supply and demand, and living costs.