Suppose a Cook at a Diamond Mining Camp in Canada's

question 15

Multiple Choice

Suppose a cook at a diamond mining camp in Canada's North earns a much higher wage than a cook with similar training and experience at an office building in Halifax.Economists would likely call this

• A)a temporary factor-price differential.
• B)a compensating differential.
• C)an intrinsic difference.
• D)an acquired difference.
• E)an equilibrium differential.

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Definitions:

Indenture

A formal legal agreement, contract, or document, especially one outlining the terms of a bond or trust.

Deferred Call

Call provision prohibiting the company from redeeming the bond before a certain date.

Coupon Rate

The interest rate on a bond, expressed as a percentage of the bond's face value, paid by the bond issuer to the bondholder at specified intervals.

Zero-Coupon Bond

A bond that does not pay periodic interest, but is issued at a deep discount, with the return being the difference between the purchase price and the face value at maturity.