Which Statement About Interest Rates Is True

question 172

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 higher 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 more than short-run interest rates.

---

Definitions:

Intentions

The plans or goals that individuals form to guide their actions, often predicting behavior in various contexts.

Attitudes

Predispositions or tendencies to respond positively or negatively towards a certain idea, object, person, or situation.

Behavioral Intentions

Behavioral intentions are an individual's plans or inclinations to perform a particular action or behave in a certain way in the future.

Beliefs

Deeply held convictions or acceptances that something is true or exists, often forming the basis of attitudes and behaviors.