Exam 9: Interest Rates

Which two of the following are the largest categories of fixed-income securities in the U.S.? I.U.S.government debt II.corporate debt III.municipal government debt IV.real estate mortgage debt

Which one of the following statements is correct concerning large-denomination certificates of deposit?

You want to purchase a security that will pay you $1,000 five years from now.If you want to earn an annual nominal rate of 5.5 percent,how much should you pay for this investment today?

Which one of the following is defined as a forward rate?

A Treasury bill has 21 days to maturity and a bank discount yield of 1.89 percent.What is the bond equivalent yield?

Which one of the following is unsecured debt issued by corporations on a short-term basis?

Which one of the following best describes the Fisher hypothesis?

A Treasury bill has 40 days left to maturity.The bank discount yield on the bill is 3.75 percent.What is the effective annual rate?

Which one of the following features applies to a U.S.Treasury bill?

Which one of the following is a basis point?

Inflation-indexed Treasury securities: I.adjust the principal amount on an annual basis. II)are default-free. III)offer a positive real rate of return. IV)have a variable coupon rate.

Which one of the following statements concerning the modern fixed-income market is correct?

Which of the following statements are true as applied to U.S.agency debt? I.It is equally as risky as Treasury debt. II.It is frequently subject to state taxes. III.It has the same credit guarantee as U.S.Treasury debt. IV.It generally has a lower yield than U.S.Treasury debt with the same maturity.

The following premiums apply to an 8-month bond: interest rate risk premium = 0.32 percent; liquidity premium = 0.44 percent; default premium = 1.15 percent; inflation premium = 2.44 percent; real rate = 3.20 percent.What is the expected nominal interest rate on an 8-month risky security given these values?

Which one of the following actions is the Federal Reserve most likely to take if it is concerned about a slowing economy?

An investment will make one payment of $22,500 nine years from now.What is the current value of this investment if the nominal rate of return is 4.8 percent?

Which one of the following abbreviations is the interest rate that international banks charge one another for overnight Eurodollar loans?

The approximate nominal interest rate is computed as the real rate:

Which one of the following rates is used by brokerage firms as the basis for determining margin loan rates?

Which one of the following statements is correct concerning U.S.Treasury bill rates for the period 1800-2010?