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:

Childhood Vaccinations

Immunizations given in early life to protect against various infectious diseases like measles, mumps, and polio.

Correlation

A statistical measure that indicates the extent to which two or more variables fluctuate together, but does not necessarily imply causation.

Alternative Health Care

Health care practices and products that are not typically part of conventional medical treatment, including herbal medicine, acupuncture, and chiropractic care.

Predomination

The state or condition of being dominant or having more power, influence, or presence than others.