An Unintended Byproduct of a Market Exchange That Is Allocated

question 7

Multiple Choice

An unintended byproduct of a market exchange that is allocated outside the market system is _____.

• A)a restrictive covenant
• B)an externality
• C)a pollution right
• D)an external damage

---

Definitions:

Unbiased Expectations

Unbiased expectations theory suggests that the future interest rates can be estimated by using the current long-term interest rates, assuming they are an unbiased predictor of future rates.

Future Earnings

Projected or anticipated earnings of a company, based on current trends, industry conditions, and other factors.

Term Lending Agreement

A contractual agreement between a borrower and a lender that stipulates the terms and conditions under which a loan will be advanced and repaid over a specific period.

Original Maturity

The original duration set during the issuance of a financial instrument, such as a bond or loan, indicating the period until the principal is supposed to be paid back.