Which of the Following Statements Is Correct

question 24

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 is expected to decrease in the future, then the yield curve should have an upward slope.

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Definitions:

Self-esteem

An individual's subjective evaluation of their own worth, encompassing beliefs and emotions about oneself.

Social Comparison

The act of comparing oneself to others in order to evaluate or enhance one's own abilities or opinions.

Cognitions

The mental processes involved in gaining knowledge and comprehension, including thinking, knowing, remembering, judging, and problem-solving.

Self-esteem

An individual's subjective evaluation of their own worth, including beliefs about oneself and emotional states.