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.

---

Definitions:

Speech Errors

Speech errors are involuntary mistakes or deviations from the intended speech output, which can involve phonemes, words, or phrases and provide insights into the cognitive processes underlying speech production.

Word Substitutions

Word substitutions are errors in speech or writing where one word is mistakenly used in place of another, often reflecting a linguistic processing error.

Commissive

Pertaining to the type of speech act or statement that commits the speaker to a particular course of action.

Speech Act

A term in linguistics and the philosophy of language referring to an utterance that performs an action (such as promising, ordering, greeting).