Which of the Following Statements Is Correct

question 34

Multiple Choice

Which of the following statements is correct?

• A) The probability of default is higher on short -term bonds than on long-term bonds.
• B) Reinvestment rate risk is lower, other things held constant, on long-term than on short-term bonds.
• C) According to the market segmentation theory, the yield curve is expected to slope downward.
• D) Borrowers prefer to borrow on a short-term basis, as a result, the yield curve is downward sloping.
• E) If the inflation was expected to decrease in the future, then the yield curve would have an upward slope.

---

Definitions:

Unanimous Agreement

A decision or conclusion reached with the approval and consent of all parties or members involved.

Criminal Trials

Judicial proceedings where an individual is accused of committing a crime and the matter is presented before a judge or jury for determination of guilt.

Higher Standard Of Proof

The requirement to provide more substantial evidence in a legal case to meet a more stringent level of proof.

Motion To Suppress

A formal request made to a court to exclude certain evidence from being considered during a trial on the grounds that it was improperly obtained.