Market Participants Have Tended to Construct Yield Curves from Observations

question 34

Multiple Choice

Market participants have tended to construct yield curves from observations of prices and yields in the Treasury market. Two reasons account for this tendency. Which of the below is ONE of these reasons?

• A) The smallest and most inactive bond market, the Treasury market offers the fewest problems of illiquidity or frequent trading
• B) Treasury securities have a small amounts of default risk, and differences in creditworthiness do affect yield estimates.
• C) The largest and most active bond market, the Treasury market offers the fewest problems of illiquidity or infrequent trading.
• D) Treasury securities are full of default risk, and differences in creditworthiness do not affect yield estimates.

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An extremely infectious virus affecting the respiratory system, leading to high fever, significant discomfort, and nasal congestion, frequently seen in widespread outbreaks.

Allergy

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