Compared with a Treasury Bond,a Treasury Note

question 15

Multiple Choice

Compared with a Treasury bond,a Treasury note:

• A) pays a higher interest rate.
• B) is sold at a price below its face value.
• C) is sold in terms of price to the highest bidder.
• D) has a higher yield.

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Definitions:

Liability Account

An accounting record that represents an entity's obligations to pay debts owed to other entities in the future.

Horizon Problems

Challenges faced by management in making decisions that benefit short-term performance at the expense of long-term gains, often influenced by the tenure of managers or external pressures.

Dividend Retention

The strategy of reinvesting company profits instead of distributing them to shareholders as dividends to fuel future growth.

Risk Aversion

The preference to avoid uncertainty, with individuals or entities preferring more predictable outcomes over less predictable ones.