The Risk Structure of Interest Rates Refers to The

question 98

Multiple Choice

The risk structure of interest rates refers to the:

• A) amount of extra interest necessary to compensate investors for the greater default risk of some bonds.
• B) relationship among the interest rates on bonds with the same maturity.
• C) relationship among the interest rates on similar bonds with different maturities.
• D) amount of extra interest needed to compensate investors for the lesser liquidity of some bonds.

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Definitions:

Few Sellers

A market structure characterized by a small number of sellers, leading to a higher level of market power and potentially less competition.

Oligopolies

Market structures characterized by a small number of firms controlling a large portion of the market share, influencing prices and competition.

Duopolies

A market structure where two companies own all or nearly all of the market for a given type of product or service.

Cartel

An association of manufacturers or suppliers formed to maintain high prices and restrict competition.