Factor Proportions Theory States That

question 22

Multiple Choice

Factor proportions theory states that:

• A)firms must develop competitive advantages to counter global competition in their industries.
• B)production of the new product will occur completely in the home country of its innovation.
• C)most trade in manufactured goods will be between countries with similar per capita incomes.
• D)countries would produce and export goods that required resources that were in great supply.
• E)a nation's competitiveness in an industry depends on the capacity of the industry to innovate and upgrade.

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Definitions:

Yield

The income return on an investment, such as the interest or dividends received, expressed annually as a percentage of the investment's cost.

Duration

A measure of the sensitivity of a bond's or fixed income portfolio's price to changes in interest rates, typically expressed in years.

Basis Points

A unit of measure used in finance to describe the percentage change in the value or rate of a financial instrument, equal to 1/100th of 1%.

Yield To Maturity

The total return anticipated on a bond if held until its maturity date, factoring in its current market price, face value, interest rate, and time to maturity.