A Normal Yield Curve That Is Upward Sloping Implies That

question 42

Multiple Choice

A normal yield curve that is upward sloping implies that:

• A)the returns on short-term securities are higher than the returns on long-term securities of similar risk.
• B)the returns on long-term securities are equal to the returns on short-term securities of similar risk.
• C)the returns on short-term securities are lower than the returns on long-term securities of similar risk.
• D)the returns on bonds with higher maturity risks are lower than the returns on bonds with lower maturity risks.
• E)the returns on bonds with a lower default risks are higher than the returns on bonds with higher default risks.

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Definitions:

Phineas Gage

Phineas Gage was a railroad construction foreman who survived an accident in the 19th century causing a large iron rod to pass through his brain, profoundly affecting his personality and behavior, and contributing to the understanding of the brain's role in personality and cognitive function.

Personality

An amalgamation of elements or qualities that constitute a person's distinct identity and modes of behavior.

Frontal Lobes

are the parts of the brain located at the front of each cerebral hemisphere, responsible for decision making, problem solving, and controlling behavior.

Planning

The process of setting goals, developing strategies, and outlining tasks and schedules to accomplish the goals.