Which One of the Following Statements Is Correct

question 68

Multiple Choice

Which one of the following statements is correct?

• A)The yield curve relates time to maturity to interest rates on zero coupon bonds.
• B)The yield curve is based on Treasury bill yields.
• C)The term structure of interest rates is based on default-free, pure discount securities.
• D)The term structure of interest rates is based on default-free, coupon bonds.
• E)The yield curve ignores default risk while the term structure includes a default risk premium.

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Definitions:

Federal Government

The national government of a federated state, which is responsible for certain functions such as defense and monetary policy.

Inflation

The growth rate in the general cost of goods and services, causing a downturn in the power to make purchases.

World War II

A global conflict that lasted from 1939 to 1945, involving most of the world's nations, including all of the great powers.

Dale Carnegie Institute

An educational institution offering courses in leadership, public speaking, sales, and personal development, based on the principles of its founder, Dale Carnegie.