21. An analyst is considering investing in the following bonds:
Bond | Description | Time to Maturity | 1 | Government Security | 10 Years | 2 | AA Corporate | 10 Years | 3 | AA Corporate | 15 Years |
If investors expect the rate of inflation to remain constant over the next 15 years, will the risk premium for Bond 2 most likely be the same, higher, or lower compared to the risk premium for:
| Bond 1? | Bond 3? | A. | Same | Same | B | Same | Lower | C | Higher | Same | D | Higher | Lower |
Select exactly 1 answers from the following: A. B. C. D.
答案和详解如下！
Feedback: Correct answer: D
2006 Level I Program Readings, 揟he Financial Environment: Markets, Institutions, and Interest Rates,?Ch. 4, pp. 130-143, including Box on pp. 142-143, Fundamentals of Financial Management, 10th edition, Eugene F. Brigham and Joel F. Houston (Dryden, 1998), pp. 206-210 2006 Modular Level I, Vol. II, pp. 308-312Study Session 5-25-g, h explain the effect of inflation on the real rate of return earned by financial securities and by physical assets; describe default risk, liquidity risk, and maturity risk premiums
Bond 2 has greater default risk than Bond 1; Bond 2 has less maturity risk than Bond 3.
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发表于 2006-11-21 11:51
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