You Are Given the Following Data: Assume That a Highly

question 28

Multiple Choice

You are given the following data: Assume that a highly liquid market does not exist for long-term T-bonds,and the expected rate of inflation is a constant.Given these conditions,the nominal risk-free rate for T-bills is __________,and the rate on long-term Treasury bonds is __________.

• A) 4%; 14%
• B) 4%; 15%
• C) 11%; 14%
• D) 11%; 15%
• E) 11%; 17%

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Definitions:

Rectal

Related to the rectum, the final section of the large intestine, terminating at the anus.

Pasteurization

A heat treatment process applied to food and drinks to kill harmful microorganisms and extend shelf life without significantly altering the taste or nutritional value.

Sterilizing (Autoclave)

A process of killing all microorganisms, including spores, on tools or equipment by using high pressure and steam in a device known as an autoclave.

Boiling

The rapid vaporization of a liquid when it is heated to its boiling point.