A Treasury Bond Due in One Year Has a Yield

question 44

Multiple Choice

A Treasury bond due in one year has a yield of 6.2%;a Treasury bond due in 5 years has a yield of 6.7%.A bond issued by General Motors due in 5 years has a yield of 7.9%;a bond issued by Exxon due in one year has a yield of 7.2%.The default risk premiums on the bonds issued by Exxon and General Motors,respectively,are

• A) 1.0% and 1.2%
• B) 0.5% and .7%
• C) 1.2% and 1.0%
• D) 0.7% and 0.5%
• E) none of these

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Definitions:

Apples

A popular fruit cultivated worldwide, known for its variety in taste, color, and utility in both raw and cooked forms.

Bananas

A kind of extended, consumable fruit that comes from a range of big, herbaceous blooming plants belonging to the Musa genus.

Budget Constraint

A representation of all the combinations of goods and services that a consumer can afford to buy at given prices within their income level.

Apples

A type of fruit that is cultivated worldwide and comes in various colors, including red, green, and yellow, known for its crisp texture and sweet to tart flavor.