The Following Yields on 20 Year Bonds Prevailed in January

question 23

Multiple Choice

The following yields on 20 year bonds prevailed in January for the three securities shown:
The difference in yields is due primarily to

• A) maturity risk premium
• B) default risk premium
• C) seniority risk premium
• D) financial risk premium

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Definitions:

Complementary Strand

A nucleic acid strand that forms a sequence match according to the base pairing rules with another strand.

Base Sequence

The order of nucleotide bases in a DNA or RNA molecule that encodes genetic information.

Uracil

A nitrogenous base found in RNA that pairs with adenine during RNA synthesis.

Nucleotide Bases

The building blocks of DNA and RNA molecules, consisting of adenine (A), cytosine (C), guanine (G), thymine (T), and uracil (U, in RNA).