The Differences Between Interest Rates on US Domestic Certificates of Deposit,Treasury

question 3

Multiple Choice

The differences between interest rates on US domestic Certificates of Deposit,Treasury bills,Commercial Paper,Eurodollar Certificates of Deposit,and Fed funds

• A)tend to persist when rates are rising,but not when rates are falling
• B)tend to persist when rates are falling,but not when rates are rising
• C)are not persistent when rate are rising or falling- hence,these instruments are not close substitutes for the short-term investments manager
• D)are persistent when rates are rising or falling - hence,these instruments are close substitutes for the short-term investments manager

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