If an Investor Is Certain That Market Interest Rates Will

question 9

Multiple Choice

If an investor is certain that market interest rates will decline in the future,which of the following will she be most likely to purchase?

• A) a six-month government bill
• B) a two-year government note
• C) a ten-year government bond
• D) a fifty-year government bond

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Definitions:

IFRS

Stands for International Financial Reporting Standards, a set of accounting standards developed by the International Accounting Standards Board (IASB) that guide companies in preparing financial statements on a global basis.

U.S.GAAP

United States Generally Accepted Accounting Principles, which are accounting standards used in the U.S. to prepare, present, and report financial statements.

Profitability

A rephrasing of profitability analysis, it refers to a company's ability to generate profit from its operations relative to its costs.

Productivity

A measure of efficiency that shows the amount of output produced per unit of input.