Which Statement About Interest Rates Is True

question 127

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) Long-run bonds tend to be riskier than short-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.

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Definitions:

Taste Buds

Sensory organs located on the tongue that are responsible for perceiving and distinguishing between different tastes.

Semicircular Canals

Structures in the inner ear involved in maintaining balance and sensing head rotation.

Cochlea

Spiral-shaped structure of the vertebrate inner ear containing the sensory receptors for hearing.

Inner Ear

Portion of the ear consisting of a vestibule, semicircular canals, and the cochlea where equilibrium is maintained and sound is transmitted.