Which of the Following Is a Likely Result of the Deregulation

question 62

Multiple Choice

Which of the following is a likely result of the deregulation of the airline industry that might benefit consumers?

• A)a wage increase for union pilots
• B)a possible decline in airline safety
• C)one firm emerging as an unregulated monopoly
• D)loss of service on unprofitable routes
• E)an increase in the number of airline companies

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Definitions:

Convexity

This is a measure of the curvature or the degree of the curve in the relationship between bond prices and bond yields, indicating how the duration of a bond changes as the interest rate changes.

Bond Price

The amount of money an investor pays to purchase a bond and can fluctuate based on interest rates, credit quality, and other factors.

Coupon Rates

The annual interest rate paid by bond issuers to the bondholders, usually fixed throughout the life of the bond.

Price Volatility

A statistical measure of the dispersion of returns for a given security or market index, indicating how much and how quickly the value of an asset changes.