If the Pure Expectations Theory Is Correct (That Is,the Maturity

question 61

Multiple Choice

If the pure expectations theory is correct (that is,the maturity risk premium is zero) ,which of the following is CORRECT?

• A) An upward-sloping Treasury yield curve means that the market expects interest rates to decline in the future.
• B) A 5-year T-bond would always yield less than a 10-year T-bond.
• C) The yield curve for corporate bonds may be upward sloping even if the Treasury yield curve is flat.
• D) The yield curve for stocks must be above that for bonds,but both yield curves must have the same slope.
• E) If the maturity risk premium is zero for Treasury bonds,then it must be negative for corporate bonds.

Recognize the importance of loan security and the role of collateral.

Explain the process and benefits of obtaining loans through the Small Business Administration (SBA).

Describe various financing options available for small businesses, including equity capital, trade credit, and factoring.

Understand the implications of loan terms such as maturity, interest rates, and repayment schedules.

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Definitions:

Gametophyte Generation

The haploid, gamete-producing phase in the life cycle of plants and algae that alternates with the sporophyte generation.

Gymnosperms

A group of seed-producing plants that includes conifers, cycads, Ginkgo, and gnetophytes, characterized by seeds not enclosed in an ovary.

Diploid

Referring to cells or organisms having two sets of chromosomes, one set inherited from each parent.

Sporophyte Generation

The diploid phase in the life cycle of plants and algae that produces spores through meiotic division, alternating with the gametophyte generation.