The Following Figure Shows the Inflation Rate and Ten-Year Bond

question 51

Multiple Choice

The following figure shows the inflation rate and ten-year bond yield. Refer to this figure when answering
Figure 14.4: Inflation and 10-Year Bond Yields
-Consider Figure 14.4 above. For most of 2008 the:

• A) real interest rate was negative
• B) 10-year-bonds' nominal interest rate was less than the real interest rate
• C) real interest rate was zero
• D) real interest rate was positive
• E) None of these answers are correct.

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Definitions:

Shareholders Equity

The residual interest in the assets of a company after liabilities are deducted, effectively the net worth attributable to shareholders.

Treasury Stock

Represents shares that were issued but have been bought back by the issuing company, reducing the amount of outstanding stock on the market.

Treasury Stock

Shares that were once part of the outstanding stock but were bought back by the company and are held in the company's treasury.

Owners' Equity

Represents the residual interest in the assets of a company after deducting its liabilities.