The Difference Between the 30-Year Mortgages Rate and the 30-Year

question 23

Multiple Choice

The difference between the 30-year mortgages rate and the 30-year Treasury bond rate is primarily attributable to

• A)interest rate risk.
• B)reinvestment rate risk.
• C)credit risk.
• D)insurance risk.

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Definitions:

Net Working Capital

The difference between a company's current assets and current liabilities, indicating the liquidity of the business.

Accounts Receivable

Accounts receivable from customers for deliveries of goods or provision of services by a company, payment for which is not yet made.

Inventory

The total amount of goods and materials held in stock by a company, intended for sale or production.

Initial Cash Flow

The amount of cash inflow or outflow at the beginning of a project or investment, setting the basis for future financial analysis.