Which of the Following Terms Is Used to Describe a Situation

question 33

Multiple Choice

Which of the following terms is used to describe a situation in which the price of an asset rises above what appears to be its fundamental value?

• A)"random walk"
• B)"random bubble"
• C)"speculative bubble"
• D)"speculative hedge"

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Definitions:

Yield To Maturity

The total return anticipated on a bond if held until it matures, factoring in current market price, par value, coupon interest rate, and time to maturity.

Semi-Annual

Occurring twice a year; pertaining to a period of six months.

Coupon Bond

A debt security that pays the holder a fixed interest rate, known as the coupon, usually annually or semi-annually, until its maturity date.

Present Value

The present-day value of future money or cash flows, based on a specific rate of return.