S. Which of the following represents the correct ordering of returns over a. Tre
ID: 1135684 • Letter: S
Question
S. Which of the following represents the correct ordering of returns over a. Treasury bills, long-term corporate bonds, common stocks, small b. Small firm common stocks, common stocks. long-term corporate c. Treasury bills. common stocks, long-term corporate bonds, small d. Long-term corporate bonds. Treasury bills, common stocks, small the period 1926 to 2011 (from lowest to highest return)? firm common stocks bonds. Treasury bills firm common stocks firm common stocks 6. Suppose the following rates are averages for banks in your area: interest checking accounts pay 1%, savings accounts pay 2%, and one- year certificates of deposit pay 3%. All accounts are federally insured by the fDIC. The difference in rates can be explained mainly by a. Liquidity premiums. b. Default risk premiums. c. Maturity premiums. d. Inflation risk premiumsExplanation / Answer
Answer 5:
Option B. The correct ordering of returns over the period 1926 to 2011 is represented by - Small firm common stocks, common stocks, long term corporate bonds and treasury Bills.
Answer 6:
Option A. The difference in the rates is represented by the liquidity premium. Difference in liquidity represents the difference in the rates of return.
Answer 7:
Option C. Yield curve represents the reltionship between interest rates and maturities of debt securities.
Answer 8:
Option C. A normal yield curve is upward sloping showing that interest rate increases with the increase in maturity.
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