Use the Table for the Question(s) Below -Based Upon the Information Provided in the Table Above, You

question 83

Multiple Choice

Use the table for the question(s) below.
The following table summarises prices of various default-free zero-coupon bonds (expressed as a percentage of face value) :
$\begin{array} { l c c c c c } \hline \text { Maturity (years) } & \mathbf { 1 } & \mathbf { 2 } & \mathbf { 3 } & \mathbf { 4 } & \mathbf { 5 } \\\hline \text { Price (per } \$ 100 \text { face value) } & 94.52 & 89.68 & 85.40 & 81.65 & 78.35 \\\hline\end{array}$
-Based upon the information provided in the table above, you can conclud?

• A) that the yield curve is downward sloping.
• B) nothing about the shape of the yield curve.
• C) that the yield curve is upward sloping.
• D) that the yield curve is flat.

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Definitions:

Cash

Liquid currency and equivalents that a company can use immediately for transactions.

Wages Payable

A liability account that represents the amount of wages owed to employees for work that has been performed but not yet paid.

Unearned Rent

Income received for rent that has not yet been earned because the rental period has not taken place.

Account Group

A classification system in accounting for organizing accounts into categories within financial statements.