FIN 351 CHAPTER 12 QUIZ 56 TO 60
56. The most widely used theory to explain the term structure of interest rates is the
A. Liquidity preference theory
B. Market segmentation theory
C. Expectations hypotheses
D. Interest allocation theory
57. Short-term interest rates have _________ volatility in comparison to long-term interest rates
A. Much less
B. More
C. Equal
D. Slightly less
58. The Feldstein and Eckstein classic study found all of the following about bond yields except they are
A. Inversely related to the money supply
B. Directly related to economic activity
C. Directly related to the level of inflation
D. Directly related to the supply of loanable funds by the government
59. A 15 year, 7% coupon rate bond is selling for $771.82. What is the current yield of the bond?
A. 22.8%
B. 7.0%
C. 9.1%
D. 10.0%
E. 30.7%
60. A 15 year, 7% coupon rate bond is selling for $771.82. What is the yield to maturity of the bond?
A. 22.8%
B. 7.0%
C. 9.1%
D. 10.0%
E. 30.7%
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