Which of the Following Statements Is CORRECT

question 42

Multiple Choice

Which of the following statements is CORRECT?

• A) Liquidity premiums are generally higher on Treasury than corporate bonds.
• B) 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.
• C) Default risk premiums are generally lower on corporate than on Treasury bonds.
• D) Reinvestment rate risk is lower, other things held constant, on long-term than on short-term bonds.
• E) 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.

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Definitions:

Genetic Disorder

A condition caused by abnormalities in an individual's DNA, leading to physical or physiological issues.

Diet

The variety and amount of food and drink consumed by a person, which can impact health, weight, and well-being.

PKU

Short for Phenylketonuria, a genetic disorder resulting from the body's inability to break down the amino acid phenylalanine, potentially leading to intellectual disability if untreated.

Chromosome Pattern

The specific arrangement or organization of chromosomes within an organism's cells, which determines genetic inheritance.