Which of the Following Statements Regarding Yield Curves Is True

question 75

Multiple Choice

Which of the following statements regarding yield curves is true?

• A) Yields on corporate debt securities will move in the same direction as government securities.
• B) Yields on corporate debt securities are considered a greater financial risk and will have higher interest rates.
• C) Yield curves for corporate securities change daily to reflect current competitive conditions.
• D) All of the options above are correct.

Realize the significance of preparing both sides of an issue when presenting to a neutral audience.

Develop strategies to overcome stage fright and enhance presentation delivery.

Describe types and characteristics of shares in a corporation.

Explain the rights and responsibilities of shareholders and directors in a corporation.

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Definitions:

Dividend Preference Theory

A theory suggesting that investors prefer dividends from current earnings over potential capital gains because of the perceived certainty of dividend payments.

Bird in Hand

A theory in finance that suggests investors prefer the certainty of dividend payments to the potential for future capital gains.

PE Ratio

The Price to Earnings Ratio, a metric used to evaluate the valuation of a stock by dividing its current share price by its earnings per share.

EPS

Earnings Per Share, a company's profit divided by its number of outstanding shares of stock, indicating the company's profitability.