Which of the Following Statements Is CORRECT

question 60

Multiple Choice

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 rate risk is lower, other things held constant, on long-term than on short-term bonds.

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Definitions:

Boolean Operators

A word used to refine logical searches. For Internet searches, the words AND, NOT, and OR describe the relationships between keywords in the search.

AND

A logical operator in programming and mathematics that results in true if and only if all operands are true.

OR

A logical operation that yields true if any of its operands are true, commonly used in programming and digital logic.

Text Messaging

The act of sending brief, electronic messages between two or more mobile devices.