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Shaniq Can Spend the Next Hour Studying for a Finance

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Essay

Shaniq can spend the next hour studying for a finance test,hiking along the Oregon coast,watching reruns of Lost on television,or napping.If she decides to study,what is the opportunity cost of her choice: hiking,watching television,or napping?


Definitions:

Coupon

A coupon is the interest payment made to bondholders, usually on an annual or semi-annual basis.

Market Rate of Interest

The prevailing rate at which interest is paid by borrowers for accessing funds in the financial market.

Selling For

The process or act of offering goods or assets for sale at a particular price.

Normal Yield Curve

When the yield curve slopes upward, it is said to be “normal,” because it is like this most of the time.

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