Atlas Corporation is in sound financial condition. It sells a long-term bond. Which of the following make the interest rate on this bond lower than otherwise?
a. Both Altas' sound finances and the long term of the bond.
b. Atlas' sound finances but not the long term of the bond.
c. The long term of the bond but not Atlas' sound finances.
d. Neither Atlas' sound finances nor the long term of the bond.
b
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The theory of efficient markets suggests that:
A) systemically important financial institutions are more likely to fail. B) long-term investments by banks are more profitable than short-term investments. C) interest rates and inflation rates are inversely related. D) all movements in stock markets are based on rational appraisals of new information.
In the United States
A) there are more households with incomes below the mean income than above the mean income. B) there are more households with incomes above the mean income than below the mean income. C) the mode income equals the mean income. D) the income distribution is bell shaped.
If 1-year interest rates for the next five years are expected to be 4, 2, 5, 4, and 5 percent, and the 5-year term premium is 1 percent, than the 5-year bond rate will be
A) 2 percent. B) 3 percent. C) 4 percent. D) 5 percent.
If you buy a put option on Treasury futures at 115, and at expiration the market price is 110, the ________ will ________ exercised
A) call; be B) put; be C) call; not be D) put; not be