Which of the Following Is NOT a Reason Advanced for the Existence

question 56

Multiple Choice

Which of the following is NOT a reason advanced for the existence of comparative advantages within financial markets?

• A)The imposition of larger credit risk premiums by long-term investors, relative to those imposed by shorter-term investors.
• B)Smaller credit risk premiums are appropriate in short-term financing because of the shorter repayment period.
• C)Taxes and regulation may impact borrowers differently.
• D)Indifference regarding the risk profile of borrowers in some markets.
• E)Some borrowers will have a 'home-ground advantage'.

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Definitions:

RLC Series Circuit

An electrical circuit consisting of a resistor (R), inductor (L), and capacitor (C) connected in series, used to filter or resonate at certain frequencies.

Capacitance

Refers to the amount of electric charge that a capacitor can hold, measured in Farads, at a given voltage.

Reactive Power

The component of electrical power that does not result in useful work, measured in VARs (volt-amps reactive), and is generated by reactive components like capacitors and inductors.

Inductive Reactance

A measure of the opposition that an inductor presents to alternating current, due to the magnetic field created by the current.