Which Statement About Interest Rates Is True

question 125

Multiple Choice

Which statement about interest rates is true?

• A) The prime rate equals the overnight rate plus 3 percent.
• B) Long-run interest rates tend to be lower than short-run interest rates.
• C) Short-run bonds tend to be riskier than long-run bonds.
• D) Investors require a higher reward for bonds with more liquidity.
• E) Long-run interest rates fluctuate less than short-run interest rates.