A Dummy Variable May Take

question 90

Multiple Choice

A dummy variable may take

• A)only the value 0 or 1
• B)only the value -1 or 1
• C)only non-negative values
• D)any value between 0 and 1

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Definitions:

Call Provisions

Conditions under which a bond issuer can retire the bond before it matures.

Interest Rates

It denotes the cost, specified as a percentage of the principal, imposed on borrowers by lenders for the privilege of using their assets.

Coupon Rate

The annual interest rate paid on a bond, expressed as a percentage of the face value and paid from issue date until maturity.

Debentures

Long-term securities issued by a company that are not secured by physical assets or collateral but by the general credit of the issuer.