The Concept of Rational Expectations First Appeared on the Economic

question 109

Multiple Choice

The concept of rational expectations first appeared on the economic scene in _______,but it wasn't until the _____________ that it received more significant notice in the economics profession.

• A) 1931; early 1970s
• B) 1961; early 1970s
• C) 1981; early 1990s
• D) 1991; early 2000s
• E) 1921; early 1980s

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Definitions:

Yield to Maturity

The expected total yield on a bond when it is kept until the date it matures.

Convertible Bond

A kind of debt security that allows for conversion into a fixed number of shares of the company issuing it, usually at the choice of the person holding the bond.

Common Stock

A type of security that signifies ownership in a corporation and represents a claim on part of the company's profits or losses.

Coupon Rate

The interest rate stated on a bond when it's issued which represents the annual interest payment the bondholder will receive.