Exam (elaborations)
Economics Of Money Banking And Financial Markets 10th Edition by Mishkin - Test bank.
- Course
- Institution
Economics Of Money Banking And Financial Markets 10th Edition by Mishkin - Test bank.
[Show more]
Seller
Follow
newsolutions
Reviews received
Content preview
Economics Of Money Banking And Financial Markets 10th Edition by Mishkin -Test bank.
Economics Of Money Banking And Financial
Description
INSTANT DOWNLOAD WITH ANSWERS
Economics Of Money Banking And Financial Markets 10th Edition by Mishkin – Test
bank
Economics of Money, Banking, and Fin. Markets, 10e
(Mishkin) Chapter 6 The Risk and Term Structure of Interest
Rates
6.1 Risk Structure of Interest Rates
1) The risk structure of interest rates is
1. A) the structure of how interest rates move over time.
2. B) the relationship among interest rates of different bonds with the same maturity.
3. C) the relationship among the term to maturity of different bonds.
4. D) the relationship among interest rates on bonds with different maturities.
Answer: B
,Economics Of Money Banking And Financial Markets 10th Edition by Mishkin -
Test bank.
Ques Status: Previous Edition
AACSB: Reflective thinking skills
2) The risk that interest payments will not be made, or that the face value of a bond is not repaid
when a bond matures is
1. A) interest rate risk.
2. B) inflation risk.
3. C) moral hazard.
4. D) default risk.
Answer: D
Ques Status: Previous Edition
3) Bonds with no default risk are called
1. A) flower bonds.
2. B) no-risk bonds.
3. C) default-free bonds.
4. D) zero-risk bonds.
Answer: C
Ques Status: Previous Edition
4) Which of the following bonds are considered to be default-risk free?
1. A) Municipal bonds
2. B) Investment-grade bonds
3. C) U.S. Treasury bonds
,Economics Of Money Banking And Financial Markets 10th Edition by Mishkin -
Test bank.
4. D) Junk bonds
Answer: C
Ques Status: Previous Edition
AACSB: Analytic skills
5) U.S. government bonds have no default risk because
1. A) they are backed by the full faith and credit of the federal government.
2. B) the federal government can increase taxes to pay its obligations.
3. C) they are backed with gold reserves.
4. D) they can be exchanged for silver at any time.
Answer: B
Ques Status: Previous Edition
AACSB: Reflective thinking skills
6) The spread between the interest rates on bonds with default risk and default-free bonds is
called the
1. A) risk premium.
2. B) junk margin.
3. C) bond margin.
4. D) default premium.
Answer: A
Ques Status: Previous Edition
AACSB: Analytic skills
, Economics Of Money Banking And Financial Markets 10th Edition by Mishkin -
Test bank.
7) If the probability of a bond default increases because corporations begin to suffer large
losses, then the default risk on corporate bonds will and the expected return on these bonds
will , everything else held constant.
1. A) decrease; increase
2. B) decrease; decrease
3. C) increase; increase
4. D) increase; decrease
Answer: D
Ques Status: Previous Edition
AACSB: Reflective thinking skills
8) A bond with default risk will always have a risk premium and an increase in its
default risk will the risk premium.
1. A) positive; raise
2. B) positive; lower
3. C) negative; raise
4. D) negative; lower
Answer: A
Ques Status: Previous Edition
AACSB: Reflective thinking skills
9) If a corporation begins to suffer large losses, then the default risk on the corporate bond will
1. A) increase and the bond’s return will become more uncertain, meaning the expected return
on the corporate bond will fall.
The benefits of buying summaries with Stuvia:
Guaranteed quality through customer reviews
Stuvia customers have reviewed more than 700,000 summaries. This how you know that you are buying the best documents.
Quick and easy check-out
You can quickly pay through credit card or Stuvia-credit for the summaries. There is no membership needed.
Focus on what matters
Your fellow students write the study notes themselves, which is why the documents are always reliable and up-to-date. This ensures you quickly get to the core!
Frequently asked questions
What do I get when I buy this document?
You get a PDF, available immediately after your purchase. The purchased document is accessible anytime, anywhere and indefinitely through your profile.
Satisfaction guarantee: how does it work?
Our satisfaction guarantee ensures that you always find a study document that suits you well. You fill out a form, and our customer service team takes care of the rest.
Who am I buying these notes from?
Stuvia is a marketplace, so you are not buying this document from us, but from seller newsolutions. Stuvia facilitates payment to the seller.
Will I be stuck with a subscription?
No, you only buy these notes for $20.99. You're not tied to anything after your purchase.
Can Stuvia be trusted?
4.6 stars on Google & Trustpilot (+1000 reviews)
75632 documents were sold in the last 30 days
Founded in 2010, the go-to place to buy study notes for 14 years now