Which of the following statements is CORRECT?
A. If the maturity risk premium were zero and interest rates were expected to decrease in the future, then the yield curve for U.S. Treasury securities would, other things held constant, have an upward slope.
B. Liquidity premiums are generally higher on Treasury than corporate bonds.
C. The maturity premiums embedded in the interest rates on U.S. Treasury securities are due primarily to the fact that the probability of default is higher on long-term bonds than on short-term bonds.
D. Default risk premiums are generally lower on corporate than on Treasury bonds.
E. Reinvestment risk is lower, other things held constant, on long-term than on short-term bonds.
Answer: E
You might also like to view...
The ________ method of computing uncollectible accounts uses income statement relationships to estimate bad debts and is based on the idea that a given percent of a company's credit sales for a period are uncollectible.
What will be an ideal response?
Hearsay is only admissible when:
a. two or more persons heard the statement. b. the witness is credible. c. the prosecutor asks the court to allow the statements. d. there were no exigent circumstances. e. None of the above
A(n) ________ chart is appropriate to monitor the percent defective of a production process
Fill in the blanks with correct word
The third phase of the systems development life cycle (SDLC) is ________.
A. defining the system B. implementing the system C. determining the requirements D. maintaining the system E. design system components