Multiple Choice
Assume that the Treasury bond yield today is 2 percentage points higher than it was one year ago. Also assume that the credit (default) risk premium of an A-rated bond declined by 0.4 percentage point since one year ago. A newly issued A-rated bond will likely offer a yield today that is ____ the yield that was offered on an A-rated bond issued one year ago.
A) greater than
B) equal to
C) less than
D) A or B are both common
Correct Answer:
Verified
Correct Answer:
Verified
Q23: According to segmented markets theory, if investors
Q24: If the liquidity premium theory completely describes
Q25: If shorter-term securities have higher annualized yields
Q26: Within the category of capital market securities,
Q27: Which of the following is NOT a
Q29: Some financial institutions such as commercial banks
Q30: Other things being equal, an expected decrease
Q31: Assume that today, the annualized two-year interest
Q32: Other things being equal, the yield required
Q33: If a security can easily be converted