51. A downward sloping yield curve indicates that future short-term rates are expected to______ and outstanding security prices will _______.

a. fall; rise.

b. fall; fall.

c. rise; rise.

d. rise; fall.

52. According to the expectations theory of the term structure of interest rates,

a. investors prefer holding short-term securities.

b. the shape of the yield curve is determined by investors' expectations of future short-term interest rates.

c. institutional investors' maturity preferences determine the shape of the yield curve.

d. investors always expect short-term interest rates to increase.

e. both a and b

53. The major determinant of the bond ratings assigned by Moody's, S & P or Fitch is:

a. marketability.

b. tax treatment.

c. term to maturity.

d. default risk.

e. frequency of interest payments.