The Tendency of Markets to Automatically Gravitate Toward Equilibrium Is

question 41

Multiple Choice

The tendency of markets to automatically gravitate toward equilibrium is an application of which core principle?

• A)The Scarcity Principle
• B)The Cost-Benefit Principle
• C)The Principle of Comparative Advantage
• D)The Incentive Principle

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Definitions:

Perpetuity

A type of financial instrument that provides an infinite stream of interest payments.

Yield

The income return on an investment, such as the interest or dividends received, expressed as an annual percentage of the investment's cost or current market value.

Zero-coupon Bond

A bond that does not pay periodic interest and is sold at a discount to its face value, with the full face value repaid at maturity.

Par Value

The nominal or face value of a bond, share of stock, or other financial instrument, as stated by the issuer.