The Presence of a Term Spread That Is Usually Positive

question 37

Multiple Choice

The presence of a term spread that is usually positive indicates that:

• A) the yield curve always slopes upward.
• B) bonds of similar risk but with different maturities are not perfect substitutes.
• C) we should expect the yield curve to usually be flat.
• D) we should expect the yield curve to usually slope downward.

---

Definitions:

Unit Trusts

Investment funds that allow investors to pool their money together in a single fund, which is managed by a fund manager.

Held for Sale

A classification for assets or disposal groups that are immediately available for sale in their current condition and for which sale is highly probable.

Control Test

A criterion used to determine whether an entity has control over another entity, which could influence consolidation decisions.

Asset Recognition

The criteria and process for including items as assets in the financial statements.