1. A widening of default risk premiums is considered a positive sign for future economic prospects.

True/False

2. A convertible US$ bond could not have a yield greater than a US government bond with the same maturity.

True/False

3. The yield on overnight repurchase agreements (repos) is generally lower than the corresponding fed funds rate.

True/False

4. Which of the following bond options would increase the bond’s required yield? I. callable, II. convertible, III. putable

a. I only

b. II only

c. I and III only

d. II and III only

e. all of the above

f. none of the above

5. A ______ is a short-term loan secured by a money market instrument.

a. commercial paper

b. fed funds

c. certificate of deposit

d. repurchase agreement

e. all of the above

f. none of the above