Which of the Following Would Both Make the Interest Rate

question 57

Multiple Choice

Which of the following would both make the interest rate on a bond higher than otherwise?

• A)the interest it pays is taxed and it is long term
• B)the interest it pays is taxed and it is short term
• C)the interest it pays is tax exempt and it is long term
• D)the interest it pays is tax exempt and it is short term

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Definitions:

Utility Function

A mathematical representation that assigns a value to every possible choice to indicate the level of satisfaction or utility that choice provides to a consumer.

Demand

The quantity of a good or service that consumers are willing and able to purchase at a given price over a specified period of time.

Income

Remuneration obtained regularly through employment or investment activities.

Demand

Demand refers to the quantity of a good or service that consumers are willing and able to purchase at various prices during a given time period.