Assume That the Treasury Bond Yield Today Is 2% Higher

question 72

Multiple Choice

Assume that the Treasury bond yield today is 2% higher than it was one year ago. Also assume that the credit (default) risk premium of an A-rated bond declined by 0.4% since one year ago. A newly issued A-rated bond will likely offer a yield today that is ____ the yield that was offered on an A-rated bond issued one year ago.

• A)greater than
• B)equal to
• C)less than
• D)A or B are both common

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Definitions:

Data

Quantitative or qualitative values that represent information or attributes, often collected to analyze patterns or trends.

Equal

Signifying that two or more entities share the same value or quantity, implying no difference in measurement or status between them.

Set of Data

A collection of related sets of information that is composed of separate elements but can be manipulated as a unit by a computer.

Population Standard Deviation

A measure that quantifies the amount of variation or dispersion of a set of values in a total population.