The Difference Between the Interest Rate on Assets That Are

question 179

Multiple Choice

The difference between the interest rate on assets that are not money and the interest rate on assets that are money is:

• A)the opportunity cost of holding money.
• B)the rate of return of holding money.
• C)short-term interest rates.
• D)long-term interest rates.

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Definitions:

Borrow

The act of receiving something with the intention of returning it or its equivalent to the owner at a later date.

Preferred Stock

Preferred stock is a type of equity that typically gives its holders preference over common stockholders in terms of dividends and claims on assets in the event of liquidation, but usually does not carry voting rights.

Rate of Return

The financial outcome, whether positive or negative, on an investment over a set duration, highlighted as a percentage of the investment's initial expenditure.

Dividend

Earnings handed out by a corporation to its investors, generally as a profit distribution.