You Go to the Wall Street Journal and Notice That

question 54

Multiple Choice

You go to the Wall Street Journal and notice that yields on almost all corporate and Treasury bonds have decreased. The yield decreases may be explained by which one of the following?

• A)A decrease in U.S. inflationary expectations
• B)Newly expected decline in the value of the dollar
• C)An increase in current and expected future returns of real corporate investments
• D)Decreased Japanese purchases of U.S. Treasury bills/bonds
• E)Increases in the U.S. government budget deficit

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Definitions:

Tax Rate

The percentage at which an individual or corporation is taxed on their income or profit.

Required Return

The minimum profit that investors expect to earn on their investment to compensate for the risk taken.

Initial Cash Flow

Refers to the initial amount of money spent or received at the start of a project or investment.

Building Cost

The total expenses incurred in constructing a building, including materials, labor, and any other costs.