Question 1

The existence of rating agencies has

Accepted Answer

A)  lowered returns on corporate bonds. 
B)  raised returns on corporate bonds. 
C)  left returns on corporate bonds largely unaffected. 
D)  raised returns on both corporate bonds and Treasury securities. 
A)  lowered returns on corporate bonds. 
B)  raised returns on corporate bonds. 
C)  left returns on corporate bonds largely unaffected. 
D)  raised returns on both corporate bonds and Treasury securities.

Question 2

The greatest appeal of U.S.Treasury securities is that

Accepted Answer

A)  they have high yields. 
B)  they have no default risk. 
C)  the U.S. Treasury will repurchase them at any time. 
D)  their market prices fluctuate very little. 
A)  they have high yields. 
B)  they have no default risk. 
C)  the U.S. Treasury will repurchase them at any time. 
D)  their market prices fluctuate very little.

Question 3

The default risk premium is measured

Accepted Answer

A)  by an index published monthly by the Securities and Exchange Commission. 
B)  by an index published monthly by The Wall Street Journal. 
C)  as the difference between the yield on a non-Treasury security and the yield on a U.S. Treasury security of the same maturity. 
D)  as the difference between the nominal yield on the security and the real after-tax yield on the security. 
A)  by an index published monthly by the Securities and Exchange Commission. 
B)  by an index published monthly by The Wall Street Journal. 
C)  as the difference between the yield on a non-Treasury security and the yield on a U.S. Treasury security of the same maturity. 
D)  as the difference between the nominal yield on the security and the real after-tax yield on the security.

Question 4

According to the expectations theory,what will be the interest rate on a three-year bond if a one-year bond has an interest rate of 2% and is expected to have an interest rate of 3% next year and 5% in two year? Report your answer using a percentage with two decimal places.

Accepted Answer

The interest rate on

Question 5

What is the most important contrast between the segmented markets theory and the expectations theory?

Accepted Answer

A)  The expectation theory states that investors view similar assets that differ only with respect to maturity as perfect substitutes. 
B)  The segmented markets theory states that investors view similar assets that differ only with respect to maturity as perfect substitutes. 
C)  The expectations theory does a better job of explaining why yield curves typically are upward-sloping. 
D)  The segmented markets theory does a better job of explaining why yields on instruments of different maturities tend to move together. 
A)  The expectation theory states that investors view similar assets that differ only with respect to maturity as perfect substitutes. 
B)  The segmented markets theory states that investors view similar assets that differ only with respect to maturity as perfect substitutes. 
C)  The expectations theory does a better job of explaining why yield curves typically are upward-sloping. 
D)  The segmented markets theory does a better job of explaining why yields on instruments of different maturities tend to move together.

Question 6

Which of the following is the highest bond rating assigned by Moody's Investors Service?

Accepted Answer

A)  Aaa 
B)  A 
C)  B 
D)  Baa 
A)  Aaa 
B)  A 
C)  B 
D)  Baa

Question 7

In which of the following periods was the yield curve inverted?

Accepted Answer

A)  February 2004 
B)  February 2007 
C)  February 2010 
D)  The yield curve was not inverted during any of these periods. 
A)  February 2004 
B)  February 2007 
C)  February 2010 
D)  The yield curve was not inverted during any of these periods.

The existence of rating agencies has

The greatest appeal of U.S.Treasury securities is that

The default risk premium is measured

According to the expectations theory,what will be the interest rate on a three-year bond if a one-year bond has an interest rate of 2% and is expected to have an interest rate of 3% next year and 5% in two year? Report your answer using a percentage with two decimal places.

What is the most important contrast between the segmented markets theory and the expectations theory?

Which of the following is the highest bond rating assigned by Moody's Investors Service?

In which of the following periods was the yield curve inverted?

Introducing Money and the Financial System

Money and the Payments System

Interest Rates and Rates of Return

Determining Interest Rates

The Stock Market, information, and Financial Market Efficiency

Derivatives and Derivative Markets

The Market for Foreign Exchange

Transactions Costs, asymmetric Information, and the Structure of the Financial System

The Economics of Banking

Investment Banks, mutual Funds, hedge Funds, and the Shadow Banking System

Financial Crises and Financial Regulation

The Federal Reserve and Central Banking

The Federal Reserves Balance Sheet and the Money Supply Process

Monetary Policy

The International Financial System and Monetary Policy

Monetary Theory I: the Aggregate Demand and Aggregate Supply Model

Monetary Theory Ii: the Is-Mp Model

Filters

Exam 5: The Risk Structure and Term Structure of Interest Rates

The existence of rating agencies has

The greatest appeal of U.S.Treasury securities is that

The default risk premium is measured

According to the expectations theory,what will be the interest rate on a three-year bond if a one-year bond has an interest rate of 2% and is expected to have an interest rate of 3% next year and 5% in two year? Report your answer using a percentage with two decimal places.

What is the most important contrast between the segmented markets theory and the expectations theory?

Which of the following is the highest bond rating assigned by Moody's Investors Service?

In which of the following periods was the yield curve inverted?

Introducing Money and the Financial System

Money and the Payments System

Interest Rates and Rates of Return

Determining Interest Rates

The Stock Market, information, and Financial Market Efficiency

Derivatives and Derivative Markets

The Market for Foreign Exchange

Transactions Costs, asymmetric Information, and the Structure of the Financial System

The Economics of Banking

Investment Banks, mutual Funds, hedge Funds, and the Shadow Banking System

Financial Crises and Financial Regulation

The Federal Reserve and Central Banking

The Federal Reserves Balance Sheet and the Money Supply Process

Monetary Policy

The International Financial System and Monetary Policy

Monetary Theory I: the Aggregate Demand and Aggregate Supply Model

Monetary Theory Ii: the Is-Mp Model

Filters