The Term Structure of Interest Rates Is Upward Sloping for All

question 18

Multiple Choice

The term structure of interest rates is upward sloping for all bond types. A certain AAA-rated non-callable 10-year corporate bond has been issued at a 6.15 percent promised yield. Which one of the following bonds probably has a higher promised yield?

• A)A similar quality municipal bond
• B)A non-callable AAA-rated corporate bond with a five-year maturity
• C)A callable AAA-rated corporate bond with a 15-year maturity
• D)A non-callable AAA-rated convertible corporate bond with a 10-year maturity
• E)All of these choices are correct.

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Definitions:

Corporate Entrepreneurship

A process of creating new products, ventures, processes, or renewal within large organizations.

Intrapreneurship

The practice of applying entrepreneurial skills and approaches within an existing organization to drive innovation and strategic growth.

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The process of making plans for something, including setting goals, defining steps, and allocating resources.

Action

The process or act of doing something towards achieving a goal or resolving a problem.