The Parable of the Vineyard Owner and the Compensation Paid

question 35

Multiple Choice

The parable of the vineyard owner and the compensation paid to the laborers illustrated:

• A)the payment to the laborers according to their productivity.
• B)the payment to the laborers based upon the content of the job.
• C)the payment to the laborers based upon the hours of work.
• D)the ignorance of the owner toward the content of work.

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Definitions:

Investment Grade

Refers to the quality of a company's credit. To be considered investment grade, a company's debt must be rated at BBB- or higher by Standard and Poor's, or Baa3 or higher by Moody's.

Standard & Poor's

A financial market intelligence company known for its stock market indices such as the S&P 500, as well as its credit ratings of borrowers.

Liquidity Preference Theory

A theory that suggests investors demand a higher interest rate or premium on securities with longer maturities to compensate for the increased risk of holding them.

Term Structure

The relationship between interest rates or bond yields and different terms to maturity, represented graphically by the yield curve.