The Desire for Floating-Rate Bonds, and Consequently Their Increased Usage

question 85

True/False

The desire for floating-rate bonds, and consequently their increased usage, arose out of the experience of the early 1980s, when inflation pushed interest rates up to very high levels and thus caused sharp declines in the prices of outstanding bonds.

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Definitions:

Null Hypothesis

The null hypothesis is a statement or hypothesis that there is no significant difference or effect, typically to be tested against an alternative hypothesis.

Critical Value

The threshold in a statistical test such that if the calculated test statistic is beyond this point, the null hypothesis is rejected.

Chi-Square Tests

Statistical tests used to determine if there is a significant difference between the expected frequencies and the observed frequencies in one or more categories.

Test Statistic

A value calculated from sample data used to evaluate the credibility of a hypothesis about a population.