Fluctuations in Investment

question 70

Multiple Choice

Fluctuations in investment

• A)account for almost all of the variability in GDP during expansions
• B)account for almost all of the variability in GDP
• C)account for almost all of the variability in GDP during recessions
• D)are larger during expansions than during recessions
• E)account for more of the variability in GDP than consumption does

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Definitions:

Forward Rate

An interest rate applicable to a financial transaction that will take place in the future.

Yield To Maturity

The total return anticipated on a bond if held until it matures, considering all interest payments and the capital gain or loss.

Reinvestment Assumption

The assumption in financial planning or analysis that all cash flows or dividends will be reinvested to generate additional returns.

Coupon Rate

The interest rate stated on a bond or other fixed-income security, expressed as a percentage of the principal amount.