Use the Table for the Question(s) Below

question 49

Multiple Choice

Use the table for the question(s) below.
Consider the following zero-coupon yields on default-free securities:

-The forward interest rate is a good predictor only when investors ________ about risk.

• A) care
• B) do not care
• C) are indifferent
• D) None of the above

---

Definitions:

Opportunity Cost

The lost benefit that could have been enjoyed if the chosen option had not been taken, implying the trade-off of forgoing the next best alternative.

Efficient Production Process

A method of production that uses the least amount of resources to achieve the maximum output.

Resources And Technology

The combination of natural resources, human resources, and technology that firms use to produce goods and services.

Opportunity Cost

The cost of an alternative that must be forgone in order to pursue a certain action; the benefits you could have received by taking an alternative action.