1) The term structure of interest rates is A) the relationship among interest rates of different bonds...
Question:
1) The term structure of interest rates is
A) the relationship among interest rates of different bonds with the same maturity.
B) the structure of how interest rates move over time
C) the relationship among the term to maturity of different bonds.
D) the relationship among interest rates on bonds with different maturities.
2) Which of the following long-term bonds currently has the lowest interest rate?
A) Corporate Aaa bonds B) U.S. Treasury bonds
C) Corporate Aa bonds D) Corporate Baa bonds
3) When the Treasury bond market becomes more liquid, other things equal, the demand curve for corporate bonds shifts to the _____ and the demand curve for Treasury bonds shifts to the _____.
A) right; right B) right; left C) left; right D) left; left
4) The interest rate on municipal bonds falls relative to the interest rate on Treasury securities when
A) there is a major default in the municipal bond market.
B) income tax rates are raised.
C) municipal bonds become less widely traded.
D) corporate bonds become riskier.
E) none of the above occur.
Foundations of Financial Management
ISBN: 978-1259194078
15th edition
Authors: Stanley Block, Geoffrey Hirt, Bartley Danielsen