Which of the Following Statements Is Correct

question 14

Multiple Choice

Which of the following statements is correct?

• A)If the maturity risk premium were zero and interest rates were expected to decrease in the future, then the yield curve for government securities would, other things held constant, have an upward slope.
• B)Liquidity premiums are generally higher on government than corporate bonds.
• C)Default risk premiums are generally lower on corporate than on government bonds.
• D)Reinvestment rate risk is lower, other things held constant, on long-term than on short-term bonds.

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Definitions:

Ingroup Bias

The tendency to favor one's own group over others, often resulting in prejudice and discrimination.

Outgroup Homogeneity

Outgroup Homogeneity is the tendency to view members of an outgroup as more similar to each other than they really are, often leading to stereotyping.

Scapegoating

The practice of unfairly blaming an individual or group for problems or negative outcomes, often to divert attention from the real causes.

Implicit Association

The subconscious linking of two concepts or objects, which can influence attitudes, beliefs, and behaviors without the individual's awareness.