Which of the Following Are Demanders of Loanable Funds

question 5

Multiple Choice

Which of the following are demanders of loanable funds?

• A) households
• B) businesses
• C) governments
• D) All of these choices are correct.

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Definitions:

Coupon Bonds

Are bonds that pay the holder a fixed interest rate (the coupon) over a specified period, culminating in the return of the bond's face value on the maturity date.

Zero-Coupon Bond

A type of bond that is issued at a discount and does not pay periodic interest payments, only the face value at maturity.

Forward Interest Rate

An interest rate agreed upon now for a loan that will start at a future date, often indicative of market expectations for future interest rates.

Par Value

The nominal or face value of a stock or bond, which is the original value assigned when the security is issued.