When the Product of Reaction a Becomes the Reactant of Reaction

question 21

Multiple Choice

When the product of reaction A becomes the reactant of reaction B,this exemplifies this type of metabolic pathway:

• A)linear.
• B)bidirectional.
• C)convergent.
• D)cyclic.
• E)divergent.

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Definitions:

STRIPPED Cash Flows

Cash flows that are separated or "stripped" from an asset for investment or valuation purposes, often for the construction of zero-coupon bonds.

Arbitrage

The practice of taking advantage of price differences in different markets by buying low in one and selling high in another.

Yield Curve

A graph showing the relationship between the yields of various debt securities of the same credit quality but different maturities.

Expectations Hypothesis

A theory in finance that explains the structure of interest rates by suggesting that the long-term rate can be determined by current and future expected short-term interest rates.