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1. According to the liquidity preference hypothesis yield curves generally slope upward because

a. investors prefer short maturity obligations to long maturity obligations.

b. investors prefer long maturity obligations to short maturity obligations.

c. investors prefer less volatile long maturity obligations.

d. investors prefer more volatile short maturity obligations.

e. none of the above.

2. Assuming no change in interest rates, the duration of a coupon bond

a. changes in line with the term to maturity.

b. stays constant.

c. increases at a slower rate than the term to maturity.

d. declines more slowly than the term to maturity.

e. declines more quickly than the term to maturity

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Financial Management, Finance

Category:- Financial Management
Reference No.:- M92654717

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