Which of the Following Concepts Is Most Helpful in Explaining

question 175

Multiple Choice

Which of the following concepts is most helpful in explaining why investment increases when the interest rate falls?

• A)deadweight loss
• B)present value
• C)economic growth
• D)financial intermediation

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Definitions:

Par Value

Par value is the nominal or face value of a bond, share, or coupon as stated by the issuer.

Coupon Payments

Regular interest payments made to bondholders over the life of a bond.

Price Paid

The amount of money exchanged for the acquisition of a good, service, or asset.

Original Issue Discount

The difference between the face value of a bond and its offering price when the bond is issued at a lower price.