What financial instrument is often used to fund disaster recovery efforts?
Practice Questions
Q1
What financial instrument is often used to fund disaster recovery efforts?
Bonds
Stocks
Derivatives
Mutual funds
Questions & Step-by-Step Solutions
What financial instrument is often used to fund disaster recovery efforts?
Step 1: Understand that disaster recovery efforts need money to help rebuild and recover after a disaster.
Step 2: Learn that governments often need to raise this money quickly.
Step 3: Discover that one way governments can raise money is by issuing bonds.
Step 4: Realize that bonds are a type of loan where investors give money to the government, and in return, the government promises to pay back the money with interest later.
Step 5: Conclude that by selling bonds, governments can gather the funds needed for disaster recovery projects.
