Which of the Following Statements Is Correct

question 106

Multiple Choice

Which of the following statements is correct?

• A)Yield spreads between bonds of different quality remain static over time.
• B)Yield spreads are set by the Securities Exchange Commission.
• C)Yield spreads between bonds of different quality change over time.
• D)None of these statements is correct.

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Definitions:

Consumer Surplus

The gap between what consumers are prepared and able to spend on a product or service and the actual sum they end up paying.

Demand Curve

A graph showing the relationship between the price of a good and the quantity of that good consumers are willing and able to purchase at various prices.

Total Utility

The total satisfaction or benefit a person receives from consuming a particular quantity of goods or services.

Consumer Surplus

The difference between the maximum price a consumer is willing to pay for a good or service and the actual price they pay.