Gig Recently Heard a Radio Report That the Fed Will

question 229

Multiple Choice

Gig recently heard a radio report that the Fed will try to help get the U.S.economy back on track.If the Fed takes action,Gig would likely see:

• A)Lower interest rates.
• B)An increase in the size of the government's budget deficit.
• C)Lower government spending.
• D)An increase in the minimum wage.

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Definitions:

Cost of Equity Financing

This represents the return a company must offer investors to entice investment, effectively the cost of new equity capital.

Required Rate of Return

The least percentage of yearly return needed to entice entities or individuals to invest in a particular project or security.

Average IRR

The mean internal rate of return, calculating the average profitability of investments or projects over time.

Pre-Tax Cost

The expense incurred by an organization or individual before taxes have been deducted.