To Diversify,a Homeowner with a Variable-Rate Mortgage Should Choose Investments

question 61

Multiple Choice

To diversify,a homeowner with a variable-rate mortgage should choose investments that

• A)pay higher returns when interest rates rise and lower returns when interest rates fall.
• B)pay lower returns when interest rates rise and higher returns when interest rates fall.
• C)provide a higher return than the market average.
• D)provide a lower return than the market average.

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Definitions:

RC Parallel Circuit

An electrical circuit configuration consisting of resistors (R) and capacitors (C) connected in parallel, affecting current and voltage differently.

R

Symbol commonly used to denote resistance in electrical circuits, measured in ohms (Ω).

Power Factor

The ratio of the real power flowing to the load to the apparent power in the circuit, indicating how effectively electrical power is converted into useful work output.

RC Parallel Circuit

An electrical circuit composed of resistors (R) and capacitors (C) connected in parallel, affecting the total impedance seen by an alternating current (AC) source.