The Term Structure of Interest Rates Reflects the

question 64

Multiple Choice

The term structure of interest rates reflects the

• A)pure time value of money for various lengths of time.
• B)actual risk premium being paid for corporate bonds of varying maturities.
• C)pure inflation adjustment applied to bonds of various maturities.
• D)interest rate risk premium applicable to bonds of varying maturities.
• E)nominal interest rates applicable to coupon bonds of varying maturities.

---

Definitions:

NAV

NAV, or Net Asset Value, is the per-share value of a mutual fund or an exchange-traded fund (ETF), calculated by dividing the total value of all the securities in the portfolio, minus any liabilities, by the number of shares outstanding.

Mutual Fund

A financial instrument that pools money from various investors to invest in different types of securities, including stocks, bonds, money market instruments, and additional assets.

New York Time

The time zone observed in New York, typically Eastern Standard Time (EST) or Eastern Daylight Time (EDT), depending on the time of year.

SEC

The Securities and Exchange Commission, a U.S. regulatory agency responsible for enforcing federal securities laws and regulating the securities industry.