Question

38. Maturity is A. the time until a financial contract expires. B. the date an investor...

38. Maturity is
A. the time until a financial contract expires.
B. the date an investor sells a security.
C. the total interest accumulated on a financial security.

D. the principal amount invested in a financial security.

E. the value of the final payment received by the lender.

39. Generally, securitization results in
A. higher interest rates on loans that can be securized.
B. increased risk for investors.
C. a more liquid market for loans that can be securized.

D. increased restrictions on credit-worthiness of borrowers.

40. When the price of a bond rises,

A. the yield to maturity falls.
B. the yield to maturity rises.
C. the yield to maturity remains unchanged.

D. the change in yield to maturity is unknown.

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Answer #1

Q38
Answer
Option A
The time until a financial contract expires
The financial contracts end date is called maturity of the contract and it is used to calculate the yield on the contracts.
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Q39
Answer
Option C
C. a more liquid market for loans that can be securitized.
the securitization is used to make bonds tradable in security or money markets and that increases liquidity.
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Q40
Answer
Option A
the yield to maturity falls
the increase in the price of the bond decreases the yield to maturity as the per period coupon payment decreases % of the price of bond and that decreases the yield to maturity.

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