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According to liquidity preference theory,a decrease in money demand for some reason other than a change in the price level causes
Risk-Free Rate
The theoretical rate of return of an investment with zero risk of financial loss, typically represented by the yield on government bonds.
Equity
The ownership interest in a company, represented by the amount of money that would be returned to shareholders after paying off all liabilities.
Option Premium
The price paid by the buyer of an options contract to the seller, representing the cost of acquiring the option.
Exercise Price
The price at which the holder of an option can purchase (or sell) the underlying security, such as a stock.
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