Which of the Following Statements Describing a Par Curve Is

question 27

Multiple Choice

Which of the following statements describing a par curve is incorrect?

• A) A par curve is obtained from a spot curve.
• B) All bonds on a par curve are assumed to have different credit risk.
• C) A par curve is a sequence of yields-to-maturity such that each bond is priced at par value.

---

Definitions:

Quantity Demanded

The total amount of a good or service that consumers are willing and able to purchase at a specific price.

Price Elasticity

Quantifying the demand shift for an item in response to its price adjustments.

Responsiveness

The ability or tendency of an entity or system to react to changes, stimuli, or feedback from the environment.

Complements

Products that are usually consumed jointly (for example, bread and butter, hot dogs and hot dog buns). A decrease in the price of one will cause an increase in demand for the other.