Which of the Following Statements Is CORRECT

question 19

Multiple Choice

Which of the following statements is CORRECT?

• A) The yield on a 3-year Treasury bond cannot exceed the yield on a 10-year Treasury bond.
• B) The yield on a 2-year corporate bond should always exceed the yield on a 2-year Treasury bond.
• C) The yield on a 3-year corporate bond should always exceed the yield on a 2-year corporate bond.
• D) The yield on a 10-year AAA-rated corporate bond should always exceed the yield on a 5-year AAA-rated corporate bond.
• E) The following represents a "possibly reasonable" formula for the maturity risk premium on bonds: MRP = -0.1%(t),where t is the years to maturity.

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Definitions:

Political Preferences

The inclination or disposition of individuals towards specific political parties, ideologies, or policies.

Correlational Measures

Statistical methods used to determine the degree and direction of a relationship between two variables.

Correlation Coefficient

A statistical measure that indicates the extent to which two variables fluctuate together, showing the strength and direction of their relationship.

Statistical Measure

A statistical measure is a quantitative value that describes a characteristic of a sample or population, such as mean, median, or standard deviation.