When Long-Term Interest Rates Are Very Low, the Future Returns

question 20

Multiple Choice

When long-term interest rates are very low, the future returns that a pension fund can earn on long-term low-risk bonds are __________ if the bonds are held to maturity; if the bonds are not held to maturity, there is ____________ potential for their prices to increase.

• A)low; significant
• B)low; not much
• C)high; significant
• D)high; not much

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Definitions:

16th-Century Codex

A manuscript book from the 16th century, often elaborately decorated and containing historical, religious, or scientific texts.

Folio

A page of a manuscript or book.

Market Wage

The prevailing wage rate in a labor market, determined by supply and demand for labor.

Entry Level

In the job market, entry-level refers to positions that are designed for individuals with no or minimal professional experience, often requiring lower qualifications and providing training on the job.