Just wanting the answers, no need for an explanation for each. These are part of
ID: 1107939 • Letter: J
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Just wanting the answers, no need for an explanation for each. These are part of a study guide questions for an exam I have been studying for and I want check if my answers are correct
33. Default risk is the risk associated with: a. the bond issuer not being able to make the promised payments. b. the illiquidity associated with small issues. c. the effect on bond prices caused by changes in market rates of interest. d. changes in the expected inflation rate. -34. 34. We would expect the risk spread between Ba bonds and U.S. Treasury securities of the same maturities to: a. widen during periods of economic recession. b. remain relatively constant over the business c. decrease during economic slowdowns d. increase during economic growth periods. e. both c and d 5. The risk premium on a bond over the yield on a Treasury security of the same maturity rises with all of the following except: a. maturity b. inflation risk increases. c. interest-rate risk. d. an improved bond rating. 36. The addition of the Liquidity Premium Theory to the Expectations Hypothesis allows us to explain why: a. yield curves usually slope upward. b. interest rates on bonds of different maturities move together. c. long-term interest rates are less volatile than short term interest rates. d. yield curves are flat 37. Which of the following statements is not true of the yield curve for U.S. Treasury securities? a. The yield curve usually slopes upward. yield curve usually has a poisitive slope at shorter maturites and then slopes down at longer maturities c The yield curve shows the relationship among securities of different maturties 38. The risk structure of interest rates says: a. the interest rates on a variety of bonds will move independently of each other b. lower rated bonds will have higher yields. c. U.S. Treasury bond yields always change by more than other bonds as interest rates d. interest rates only compensate for risk during recessions. 39. Under the Liquidity Premium Theory, if investors expect short-term interest rates to remain constant, the yield curve should: a. have a positive slope. b. have a negative slope. c. be flat. d. have an increasing slope. 40. How do geopolitical tensions, such as the North Korean missile tests or a region of Spain threatening to secede affect U.S. bond markets? a. The price of U.S. Treasury bonds falls b. The price of U.S. Treasury bonds rises. c. The yield curve must become steeper. d. There is no impact on the U.S. Treasury marketExplanation / Answer
33. a.
Someone defaults when someone fails to pay back the promised amount. The same happens in the case of the bond also.
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