A Maturity Premium Is Offered on Long-Term Treasury Bonds Due

question 63

Multiple Choice

A maturity premium is offered on long-term Treasury bonds due to:

• A) the risk of changing interest rates.
• B) the risk of default.
• C) their unique risk.
• D) their systematic risk.

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Definitions:

Variable Costs

Costs that change in proportion to the level of production or business activity.

Overhead Efficiency Variance

A measure used in cost accounting to analyze the difference between the budgeted overhead costs and the actual overhead costs based on efficient use of resources.

Actual Outputs

The real, measurable production or work results achieved by a company or an individual, often compared to planned or expected outputs.

Flexible Budget

A budget that adjusts or flexes with changes in volume or activity levels, allowing for more accurate financial planning.