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Commercial paper is generally sold at a discount from: Select one: the prime rate. its face value. its cost. Treasury notes.
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Question

Commercial paper is generally sold at a discount from:Select one:a. the prime rate.b. its face value.c. its cost.

d. Treasury notes.



Which one of the following statements is true for interest rate risk?

Select one:

a. Long-term bonds are more sensitive to interest rates and have more price volatility than short-term bondst

b. Short-term bonds are more sensitive to interest rates and have more price volatility than long-term bonds.

c. short term bonds with higher coupon payment are more sensitive to interest rates and have more price volatility than long-term bonds with lower coupon payment.

d. For two comparable bonds, a bond with longer duration is less sensitive to changes in the interest rate than a bond with shorter duration.



In order to compare the risk properties of two bonds with different coupons and maturities a bond fund manager may use:

Select one:

 a. repricing gap analysis.

 b. duration analysis.

 c. technical analysis

d. liability analysis.



Interest rate risk occurs when:

Select one:

a. investors maintain bond portfolios.

b. a firm has a short-term floating rate loan.

c. a company has issued a fixed interest bond.

d. all of the given answers



The expectations theory of term structure suggests that the:

Select one:

a. yield curve should be upward-sloping.

b. yield curve should be downward-sloping.

c. shape of the yield curve reflects the risk premium incorporated into the yields on long-term bone 

d. shape of the yield curve depends on the expected future path of short-term interest rates.



For a given bond, the curvature of the price-yield curve is termed:

Select one:

a. modified duration.

b. immunisation.

c. sensitivity.

d. convexity.



What is the rate of return on a deposit of $70,000 with a value of $72,618 in 165 days

Select one:

а. 3.74%

b. 7.21%

c.7.98%

d. 8.27%

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Subject: Business, Finance

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