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LOS b: Describe a yield curve and the various shapes of the yield curve.
Q1. A normally sloped yield curve has a:
A) positive slope.
B) zero slope.
C) negative slope.
Q2. Which of the following yield curves represents a situation where long-term rates are less than short-term rates?
A) Normal yield curve.
B) Inverted yield curve.
C) Humped yield curve.
Q3. A downward sloping yield curve generally implies:
A) shorter-term bonds are less risky than longer-term bonds.
B) interest rates are expected to decline in the future.
C) interest rates are expected to increase in the future.
Q4. If investors expect future rates will be higher than current rates, the yield curve should be:
A) vertical.
B) downward sweeping.
C) upward sweeping.
Q5. The concept of spot and forward rates is most closely associated with which of the following explanations of the term structure of interest rates?
A) Segmented market theory.
B) Liquidity premium theory.
C) Expectations hypothesis.
Q6. Which of the following best explains the slope of the yield curve?
A) The nominal spread between two securities with different maturities.
B) The credit spread between two securities with different maturities.
C) The term spread between the yields of two maturities.
Q7. Which of the following is the shape of an inverted yield curve or term structure?
A) Downward sloping.
B) Flat.
C) Upward sloping.
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发表于 2009-3-2 17:00
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