Which One of the Following Statements Concerning U

question 19

Multiple Choice

Which one of the following statements concerning U.S. Treasury bills is correct for the period 1926- 2007?

• A)The annual rate of return always exceeded the annual inflation rate.
• B)The average risk premium was 0.7 percent.
• C)The annual rate of return was always positive.
• D)The average excess return was 1.1 percent.
• E)The average real rate of return was zero.

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Definitions:

Binding Price Ceiling

A government-imposed maximum price on goods or services that is set below the market equilibrium price, leading to shortages.

Binding Price Floor

A government-imposed price control that sets a minimum price for a good or service above the equilibrium price, leading to excess supply.

Surplus

The excess of production or supply over demand, often leading to lower prices or wasted resources if not managed effectively.

Binding Price Floor

A government-imposed price control or limit on how low a price can be charged for a commodity, set above the equilibrium price, leading to a surplus of the product.