Quiz Ch 03 – T/F Relationship between Short-Term and Long-Term Interest Rates
Principles of Corporate Finance
Brealey, Myers, and Allen
13th Edition
True or false: Short-term and long-term interest rates always exhibit synchronized movements.
True or false: Short-term and long-term interest rates always exhibit synchronized movements.
True or false: Spot rates for the long term generally exceed those for the short term.
True or false: The term structure of interest rates defines how yield to maturity is related to the maturity of a bond.
True or false: U.S. Treasury bonds entail negligible default risk while being exposed to inflation risk.
True or false: In the realm of U.S. Treasury offerings, inflation-indexed bonds are issued and referred to as TIPS.
True or false: There is typically a higher yield for corporate bonds compared to government bonds with the same coupon rate and maturity.
True or false: In general, the yield spread between junk bonds and United States Treasuries tends to be lower compared to the spread observed with investment-grade bonds.
True or false: For zero-coupon bonds, the duration is identical to the maturity.
What is the term for bonds where bond owners’ identities are documented, and coupon interest payments are sent automatically?
How is the volatility of a bond determined?