The Term Structure of Interest Rates

question 52

Multiple Choice

The term structure of interest rates:

• A)plots interest rates against bond ratings.
• B)is just another name for the yield curve.
• C)ignores interest rate risk premiums while the Treasury yield curve includes those premiums.
• D)ignores both inflation and interest rate risk premiums.
• E)is based on pure discount bonds while the Treasury yield curve is based on coupon bond yields.

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Definitions:

Per Capita Consumption

The average consumption of a good or service per individual within a population.

Water

A transparent, tasteless, odorless, and nearly colorless chemical substance, which is the main constituent of Earth's streams, lakes, and oceans and the fluids of most living organisms.

Energy

The capacity to do work, which comes in various forms such as kinetic, potential, thermal, electrical, chemical, nuclear, and others, and can be transformed from one form to another.

Commodities Price Index

An index that measures changes in the general price level of commodities traded in the global markets, like metals, food, and energy.