From 1980 to 2013,the Default Risk Premium Differential Between Aaa-Rated

question 72

Multiple Choice

From 1980 to 2013,the default risk premium differential between Aaa-rated bonds and Aa-rated bonds has averaged between ________.

• A)5 to 10 basis points
• B)11 to 23 basis points
• C)24 to 35 basis points
• D)36 to 50 basis points

---

Definitions:

Specified Exercise Price

The predetermined price per share at which the holder of an option can buy (call option) or sell (put option) the underlying security.

Specified Expiration Date

The predetermined date on which an options or futures contract expires, determining the last day it can be exercised or traded.

Bond Equivalent Yield

is a calculation for converting the yield on a short-term, discount-based security into an annual yield that is comparable to those of bonds, to facilitate comparison among various securities.

Bank Discount Quote

A method of quoting the price of a short-term money market instrument, like a Treasury bill, as a discount from its face value, not taking into account compound interest.