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In the 1950s,the Interest Rate on Three-Month Treasury Bills Fluctuated

question 11

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In the 1950s,the interest rate on three-month Treasury bills fluctuated between 1.0% and 3.5%.In the 1980s,the three-month Treasury bill rate ranged from 5% to over 15%.From this,one could predict that in the 1980s interest-rate risk was ________ and the demand for financial innovation was ________.


Definitions:

Investment Account

A financial account held at a brokerage or financial institution that contains securities, cash, and other holdings for investment purposes.

Common Shares

Equity securities that represent ownership in a corporation, providing voting rights and entitling holders to a share of the company's profits via dividends.

Dividend

A share of profits distributed by a company to its shareholders, typically in the form of cash or additional stock.

Net Assets

The difference between an entity's total assets and total liabilities, representing the owners' equity in a company.

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