Q10. Suppose the yield curve becomes steeper. Which of the following is a consequence of the steepening?
A) Long-term bonds become less sensitive to interest rate changes.
B) The yield spread between long and short-term securities increases.
C) Long-term bonds become more sensitive to interest rate changes.
Q11. A yield curve undergoes a parallel shift. With respect to the bonds described by the yield curve, the shift has least likely changed the:
A) durations.
B) yield to maturities.
C) yield spreads for bonds of different maturities.
Q12. Which of the following statements about yield curves is most accurate?
A) A yield curve gets steeper when spreads widen.
B) A negative butterfly means that the yield curve has become less curved.
C) A twist refers to changes to the degree to which the yield curve is humped.
Q13. Which of the following statements about yield curves is least accurate?
A) A positive butterfly means that the yield curve has become less curved.
B) The slope of the yield curve changes slightly following a parallel shift.
C) Twists and butterfly shifts are examples of nonparallel yield curve shifts. |