Assuming That the Yield Curve and Term Structure Are Both

question 49

Multiple Choice

Assuming that the yield curve and term structure are both flat at all maturities, which of the following debt instruments will probably have the lowest interest rate as measured by its yield to maturity?

• A) 20-year maturity Quebec STRIP bonds.
• B) 3-month Canadian T-bills.
• C) 2-year maturity, high quality municipal bonds.
• D) 10-year maturity Canadian government bonds.
• E) 20-year, AAA rated corporate bond

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Definitions:

Diamonds

A hard, precious stone made of crystalline carbon, renowned for its brilliance and often used in jewelry.

Yellowknife

The capital city of the Northwest Territories, Canada, known for its Indigenous culture, northern lights, and as a gateway to outdoor adventures.

Zinc

A metallic element used extensively in metal alloys and as protective coatings for iron and steel to prevent corrosion.

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The process of extracting copper from the earth, involving digging, blasting, and processing the ore.