Question

1. _________ is a plot of the yields on bonds with different terms to maturity with the same risks.

   		Expectation
   		Forward rate
   		Yield curve
   		Market segmentation

2. __________ bonds have higher default risk than bonds with ratings above Baa (BBB).

   		Expectation
   		Junk
   		Liquidity
   		Spot

3. QUESTION 3

4. ________ occurs when the bond issuer is unable to make interest payments when promised.

   		Liquidity
   		Intermediation
   		Default
   		Yield

5. 1 points   

   QUESTION 4

6. _____ indicates how much additional interest investors must receive to hold a riskier asset.

   		Risk premium
   		Default
   		Yield curve
   		Liquidity

7. 1 points   

   QUESTION 5

8. ______ is the relationship among interest rates on bonds with different terms to maturity.

   		Spot theory
   		Forward theory
   		Intermediation
   		Term structure of interest rates

9. 1 points   

   QUESTION 6

10. Which of the following are indicators affecting the Risk Structure of Interest Rates?

    		Default isk
    		Liquidity
    		Income tax consideration
    		All of the above

11. 1 points   

    QUESTION 7

12. _______ rate(s) the quality of corporate bonds in terms of probability of default.

    		The SEC
    		Credit rating agencies
    		The FOMC

13. 1 points   

    QUESTION 8

14. The actual interest rate observed at time t is the ______ rate.

    		A. expected
    		B. forward
    		C. spot
    		D. inverted
    		Both A. and D.

15. 1 points   

    QUESTION 9

16. An asset that can be quickly and cheaply converted to cash is a(n) ________ asset.

    		inverted
    		liquid
    		credit
    		junk

17. 1 points   

    QUESTION 10

18. A downward sloping Yield Curve is called an ___ Curve.

    		Normal
    		Inverse
    		Flat

Answer 1

Answers-

Q 1)

The answer is Yield Curve.

A plot of the yields on bonds with differing in terms to maturity with same risk, liquidity, and income tax considerations is called a yield curve.

The other Options are incorrect.

Q 2)

The answer is Junk.

The bonds with ratings above Baa (BBB) are investment grade and bonds with ratings below BB or lower by Standard & Poor's and Ba or lower by Moody's are junk bonds andhavehigh default risk.

The other Options are incorrect.

Q 3)

The answer of Default.  

When the the bond issuer is unable to make interest payments as promised the default occurs.

The other Options are incorrect.

Q 4)

The answer is Risk premium.

The additional interest investors must receive when holding a riskier asset is Risk premium.

The other Options are incorrect.

Note- Kindly put other questions in separate posts