The Following Represents Two Yield Curves -What Is the Probability That Two-Year B-Rated Corporate Debt Will

question 81

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 is the probability that two-year B-rated corporate debt will be fully repaid?

• A)92.9 percent.
• B)95.6 percent.
• C)97.2 percent.
• D)7.10 percent.
• E)4.40 percent.

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Definitions:

Ethical Theory

A branch of philosophy that investigates the principles of right and wrong conduct, moral life, and moral judgments.

Ethical Relativism

The belief that moral standards vary between individuals, cultures, or situations and that there are no absolute universal moral standards.

Self-Preservation

The protection of oneself from harm or destruction, often considered a basic instinct in humans and animals.

Situational Ethics

is an ethical framework suggesting that the rightness or wrongness of an action depends on the specific context, rather than on universal moral laws.