New Research Indicates That Running Marathons Is Actually Bad for the Heart

question 47

Multiple Choice

New research indicates that running marathons is actually bad for the heart (it increases inflammatory markers associated with heart attacks) . This news will:

• A) lead to a decrease in the demand for running shoes.
• B) have no effect on the demand or supply of running shoes.
• C) increase the supply of running shoes.
• D) lead to an increase in the demand for running shoes.

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Definitions:

Zero-coupon Bond

A bond that does not pay interest during its life and is sold at a discount from the face value, which is paid to the holder at maturity.

Forward Interest Rate

A rate that is deduced from current bond yields, representing the expected future interest rate between two periods.

Bond Stripping

Selling bond cash flows (either coupon or principal payments) as stand-alone zero-coupon securities.

Arbitrage

The method of earning profits by exploiting the price variances of an identical asset across diverse markets through concurrent purchase and sale.