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

question 11

Multiple Choice

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 ________.

• A) greater; lower
• B) greater; greater
• C) lower; lower
• D) lower; greater

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Definitions:

Principal Ratifies

Occurs when a principal approves and accepts the actions of an agent that were originally outside the agent's scope of authority.

Expressly Excludes

A contractual term used to specify that certain conditions or provisions are deliberately not covered within an agreement.

Vicarious Liability

Legal responsibility taken by one party for the actions of another, typically in an employer-employee relationship.

Independent Contractors

Individuals or entities hired to perform specific tasks or services for another entity under a contract, but who retain control over how those services are executed.