The zero curve is downward sloping. Define X as the 1-year par yield, Y as the 1-year zero rate and Z as the forward rate for the period between 1 and 1.5 year. Which of the following is true?

A. X is less than Y which is less than Z
B. Y is less than X which is less than Z
C. X is less than Z which is less than Y
D. Z is less than Y which is less than X


D

The forward rate accentuates trends in the zero curve. The par yield shows the same trends but in a less pronounced way.

Business

You might also like to view...

What advantage does having an ethics and compliance officer grant over having only managers or the owner, even if they are very attentive, manage ethical performance?

a. It ensures no retaliation against the sharer of information. b. It allows sensitive ethical issues to be shared without dilution by the chain of command. c. It allows sensitive ethical issues to be shared without any sanctions being levied by the organization. d. It exempts an organization from governmental sanctions over unethical behavior.

Business

Customer relationship management (CRM) programs are often called interactive marketing programs

Indicate whether the statement is true or false

Business

Which of the following are intangible assets?

a. assets you cannot touch or access b. a plug amount received to balance the books c. patents, software programs, copyrights, trademarks, and/or brand names d. property, plant, and equipment

Business

Which of the following statements does not describe the U.S. economy as we finish the first decade of the new millennium?

A. Information technology will continue to fuel the new economy. B. There will be more investment in information technology. C. There will be fewer opportunities for international trade. D. e-business will be a more important part of the economy. E. Service businesses will continue to employ more than half of the American workforce.

Business