The Following Represents Two Yield Curves -What Spread Is Expected Between the One-Year Maturity B-Rated Bond

question 37

Multiple Choice

The following represents two yield curves.
$\begin{array} { | l r r | } \hline \text { Maturity } & \text { Pure Discount Treasury Yields } & \text { B-rated Carparate Band } \\\hline & & \text { Yields (Pure Discaun Bonds) } \\1 \text { year } & 3 \text { percent } & 6\text { percent }\\2 \text { year } & 6 \text { percent }& 10 \text { percent } \\20 \text { year } & 12 \text { percent }& 17 \text { percent } \\\hline\end{array}$
-What spread is expected between the one-year maturity B-rated bond and the one-year Treasury bond in one year?

• A)3.00 percent.
• B)5.06 percent.
• C)4.00 percent.
• D)5.00 percent.

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Definitions:

Actin And Myosin

Two proteins that form the basis of muscle contraction and movement in cells, playing a crucial role in the sliding filament model of muscle contraction.

Optimal Overlap

The ideal arrangement of actin and myosin filaments within a muscle fiber for maximum muscle contraction efficiency.

Muscle Tension

The force generated by the contraction of muscles, important in movement, maintenance of posture, and the production of body heat.

Contraction

The process of a muscle becoming shorter and tighter, usually in response to a nerve impulse.