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question 2

Multiple Choice

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• A) Which of the following statements is true?
• B) The more marketable a security, the higher its yield.
• C) The longer the security's term to maturity, the greater its yield.
• D) Putable bonds offer higher yields than similar non-putable bonds
• E) Taxable bonds have to offer higher before-tax yields than comparable tax-exempt bonds.
• Use the following interest rate data to answer the next seven questions.
• 90-day Treasury bills 8.36 percent
• 180-day Treasury bills 8.48 percent
• 2-year Treasury notes 9.10 percent
• 3-year Treasury notes 9.25 percent
• 90-day Commercial paper 9.15 percent
• 3-year Corporate bonds (AA) 10.10 percent
• 3-year Municipal (AA) 7.07 percent
• Expected 2-year inflation rate 3.50 percent

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Definitions:

Arousal

Refers to the physiological and psychological state of being awoken or stimulated to action.

Asch

Refers to Solomon Asch, a psychologist known for his research on conformity and social pressure.

Line Comparison Experiment

An experiment, often associated with Solomon Asch's studies, that demonstrates how social pressure can influence individuals to conform, even when evidence contradicts the group's consensus.

Conformed

The process of adjusting one's behavior or thinking to match those of others, typically in a group context.