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.

Analyze how savings rates affect the supply of loanable funds, interest rates, exchange rates, and net exports.

Relate macroeconomic policies and political stability to interest rates, exchange rates, and net exports.

Understand the relationship between real interest rates, net capital outflow, and exchange rates.

Evaluate the role and interaction of government budget deficits, investment, and savings in shaping economic outcomes.

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Definitions:

Rotate Objects

The action of turning graphics, shapes, or text around a pivot point to a specified angle.

Picture Tools Format

A set of tools and options in software applications for editing and formatting images.

Transparent

An object or material's ability to let light pass through, so that objects behind can be distinctly seen.

Opaque

Describes an object or material that is not transparent and does not allow light to pass through.