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.

Calculate product margins using ABC information.

Analyze the distribution of resource consumption across activity cost pools.

Understand the principles and application of activity-based costing (ABC) in allocating overhead costs to products.

Comprehend how different activity cost pools impact product costing and margins under ABC.

---

Definitions:

Tangible Capital

Physical assets owned by a firm that are used in the production process, such as buildings and machinery.

Goodwill

An intangible asset that represents the value of a company's brand name, customer relationships, employee relations, and other non-physical assets.

Human Capital

The stock of habits, knowledge, social and personality attributes, including creativity, embodied in the ability to perform labor so as to produce economic value.

Critical Thinking

Critical Thinking is the analytical process of objectively evaluating information to make reasoned judgments and solve problems.