This preview shows pages 1–2. Sign up to view the full content.
This preview has intentionally blurred sections. Sign up to view the full version.View Full Document
Unformatted text preview: Treasury bond? a. Maturity risk premium b. Default risk premium c. Liquidity premium d. All of the above. 6. What is the shape of the yield curve if 20-year treasury bond rates exceed 1-year treasury bond rates? a. Downward sloping b. Flat c. Upward sloping d. None of the above 7. Which of the following is an example of a primary market transaction? a. A bank sells a mortgage to another bank. b. An IPO. c. Dave Letterman buys Viacom stock from his Uncle Earl. d. None of the above. 8. Which of the following explains how can a yield curve be flat or downward sloping if a maturity risk premium exists? a. Investors expect inflation to be higher in the future. b. Investors expect inflation to be lower in the future. c. Investors expect inflation to remain the same in the future. d. Investores expect the real rate of interest to rise in the future....
View Full Document
- Spring '10