Exponential Splines

question 1

Multiple Choice

Exponential splines

• A) is another name for the polynomial spline approach used in yield-curve estimation.
• B) Are more parsimonious than polynomial splines in using fewer parameters in yield-curve estimation.
• C) Posit a different functional form for the yield curve than do polynomial splines.
• D) Satisfy both properties (b) and (c) listed above.

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Definitions:

Idle

The state of an asset or resource not being in use, contributing no output or value during a certain period.

Fixed Assets

Long-term tangible assets that are used in the operation of a business and are not expected to be converted to cash in the short term, such as land, buildings, and machinery.

Book Value

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Final Cash Flow

The last cash flow in a series of transactions or in the timeline of an investment, project, or finance-related activity.