Investment

question 108

Multiple Choice

Investment

• A)is about as volatile as consumption,except during recession years
• B)has averaged about one-sixth of GDP over the past decade
• C)is about as volatile as GDP,except during recession years
• D)is the largest component of aggregate spending
• E)has averaged about two-thirds of GDP over the past decade

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Definitions:

Clean Price

The price of a bond net of accrued interest; this is the price that is typically quoted.

Coupon Bond

A type of bond that pays the holder periodic interest payments based on a predetermined rate (the "coupon rate") until it matures, at which point the principal (or face value) is repaid.

Yield To Maturity

The total expected return on a bond if held to its maturity date, including both interest payments and any gain or loss if the bond was purchased at a discount or premium.

Market Price

The current price level for transactions involving assets or services in a trade environment.