Which of the Following Statements Is True

question 57

Multiple Choice

Which of the following statements is true?

• A)The more liquid the bond, the lower the yield.
• B)Tax-free bonds normally have a higher interest rate than other types of bonds.
• C)The price of a bond increases as it becomes more risky.
• D)The yield curve illustrates the relative default risks of alternative types of bonds.

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Definitions:

Fine

A fine is a monetary penalty imposed as a punishment for an infraction, denial of a rule, or a criminal offense, often paid to a governmental or regulatory authority.

Clayton Act

A U.S. antitrust law, enacted in 1914, aimed at increasing economic competition and preventing corporate behaviors that could lead to monopolies or restrain trade.

Sherman Act

An essential U.S. legislation established to prevent business activities that restrict competition, ensuring fair trade practices.

Strengthen

To increase in value or improve in quality.