An Attempt to Relate Bond Yields from 1968-1991 to the Standard

question 12

Multiple Choice

An attempt to relate bond yields from 1968-1991 to the Standard and Poor's 500 found

• A) no relationship.
• B) investment grade bonds had the largest beta.
• C) bond yields were more volatile than stock yields.
• D) lowest rated bonds had the largest beta.

---

Definitions:

Actuarial Information

Data and analysis used to evaluate the financial implications of risk and uncertainty, often used in insurance and pensions.

Market Rate

The dominant interest rate in the market for investments with comparable risk and duration.

Obligation

A duty or commitment to pay money or perform some action in the future, often legally enforceable.

Present Value

Present value is the current worth of a future sum of money or stream of cash flows given a specified rate of return.