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

question 12

Multiple Choice

The following represents two yield curves. $$\begin{array} { | l | c | c | } \hline \text { Maturity } & \begin{array} { c } \text { Pure Discount } \\\text { Treasury Yields }\end{array} & \begin{array} { c } \text { B-rated Corporate Bond Yields } \\\text { (Pure Discount Bonds) }\end{array} \\\hline 1 \text { year } & 3 \text { percent } & 6 \text { percent } \\\hline 2 \text { year } & 6 \text { percent } & 10 \text { percent } \\\hline 20 \text { year } & 12 \text { percent } & 17 \text { percent } \\\hline\end{array}$$
-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.
• E)7.00 percent.

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Definitions:

Macrophage

Any large, mononuclear phagocytic cell.

Complement

A complex system of proteins in the blood that works with the immune system to destroy foreign pathogens.

Cell-mediated Immunity

A form of immunity that involves the activation of T-cells and other immune cells to defend against pathogens, independent of antibody production.

Antibody-mediated Immunity

A part of the immune response in which B cells produce antibodies after recognizing antigens, leading to the neutralization or destruction of the foreign particles.