If the Bonds of Two Different Countries Are Identical, Their

question 83

Multiple Choice

If the bonds of two different countries are identical, their expected returns will:

• A)Be equal if capital flows freely internationally
• B)Always be equal
• C)Be equal only if the exchange rate between the two countries is fixed
• D)Be equal only if the inflation rate is the same in each country

---

Definitions:

Concentration Ratio

A measure indicating the market share of the largest firms in an industry to assess the degree of competition.

Breakfast Cereal Industry

The sector of the economy that specializes in the production, marketing, and sale of breakfast cereal products.

Oligopoly

A market structure characterized by a small number of firms dominating the market, leading to limited competition and possibly higher prices.

Imperfectly Competitive Markets

Markets where individual sellers have some control over prices due to lack of perfect competition, often characterized by product differentiation, barriers to entry, or a limited number of firms.