Which of the Following Statements Is CORRECT

question 19

Multiple Choice

Which of the following statements is CORRECT?

• A) The yield on a 3-year Treasury bond cannot exceed the yield on a 10-year Treasury bond.
• B) The yield on a 2-year corporate bond should always exceed the yield on a 2-year Treasury bond.
• C) The yield on a 3-year corporate bond should always exceed the yield on a 2-year corporate bond.
• D) The yield on a 10-year AAA-rated corporate bond should always exceed the yield on a 5-year AAA-rated corporate bond.
• E) The following represents a "possibly reasonable" formula for the maturity risk premium on bonds: MRP = -0.1%(t),where t is the years to maturity.

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Definitions:

Competitive Exclusion

A principle stating that two species competing for the same resources cannot stably coexist if other ecological factors are constant; one will always outcompete the other.

Paramecium

A genus of unicellular ciliates, commonly studied as a representative of the ciliate group.

Niche Theory

A concept in ecology that describes how an organism fits into its environment, including its role in the ecosystem and interactions with other species.

Limiting Resource

A resource in an ecosystem that restricts the growth, abundance, or distribution of organisms or populations due to its scarcity.