A Treasury Yield Curve Plots Treasury Interest Rates Relative to Which

question 106

Multiple Choice

A Treasury yield curve plots Treasury interest rates relative to which one of the following?

• A)market rates
• B)comparable corporate bond rates
• C)the risk-free rate
• D)inflation
• E)maturity

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Definitions:

Money Market

The section of the financial market dealing with the lending and borrowing of short-term funds, including treasury bills, commercial paper, and certificates of deposit.

Repurchase Agreements

Short-term loans where a borrower sells securities to a lender with an agreement to buy them back at a higher price at a future date.

Commercial Paper

An unsecured, short-term debt instrument issued by a corporation, typically used for the financing of payroll, accounts payable, and inventories.

Firm's Securities

Financial instruments issued by a company, such as stocks or bonds, representing ownership or creditorship in the firm.