Which of the following risk premiums apply to both corporate securities and federal government securities? a.Default...

Which of the following risk premiums apply to both corporate securities and federal government securities?

		a.Default risk only
		b.Liquidity risk only
		c.Maturity risk only
		d.Both default risk and liquidity risk
		e.Both liquidity risk and maturity risk

Expert Solution

Correct option is > c. Maturity risk only

Maturity risk premium relates to longer tenor which bears interest rate movement risk for both federal govt securities and corporate bonds.

jeff jeffy answered 2 years ago

Long term corporate bonds would contain which of the following risk premiums. Inflation Premium Default Risk...

Long term corporate bonds would contain which of the following risk premiums. Inflation Premium Default Risk Premium Liquidity Premium Maturity Risk Premium All of the above

Does the market perception of risk free apply to all aspects of the U.S. government securities...

Does the market perception of risk free apply to all aspects of the U.S. government securities as an investment? Explain.

What is meant by “risk premium”? Risk premiums on corporate bonds are usually anticyclical; that is,...

What is meant by “risk premium”? Risk premiums on corporate bonds are usually anticyclical; that is, they decrease during business cycle expansions and increase during recessions. Why is this so?

i. Which of the following is true of corporate risk? a. It is the risk that...

i. Which of the following is true of corporate risk? a. It is the risk that is measured by beta. b. It is the risk that is used in calculating the required rate of return using beta. c. It is the risk that does not consider stockholder's diversification. d. It is the risk that is measured using the Monte Carlo simulation. ii. Which of the following costs should be included under relevant cash flows while making capital budgeting decisions? a....

Which of the following is primarily a function of the federal government?

Which of the following is primarily a function of the federal government? a. Increasing the money supply in the economy b. Ensuring that firms maximize profits c. Promoting the growth of natural monopolies d. Providing home mortgage loans e. Dealing with externalities

Of the following examples, which is associated with government spending for investment? The federal government spends...

Of the following examples, which is associated with government spending for investment? The federal government spends $2 million on updating and improving the security for the White House. The federal government spends $5 million on office supplies for federal offices. The federal government spends $400 million on fixing airports and upgrading control tower software and technology. If Congress passed a new budget that increased taxes it would increase the gross domestic product to a new equilibrium as aggregate demand shifted...

Which of the following is/are NOT corporate monitors? A. Lenders B. Security analysts C. Securities and...

Which of the following is/are NOT corporate monitors? A. Lenders B. Security analysts C. Securities and Exchange Commission D. All of the above are corporate monitors.

16) If the Fed makes an open market ________ of government securities, the federal funds rate...

16) If the Fed makes an open market ________ of government securities, the federal funds rate will ________ as the quantity of money ________. A) purchase; rise; increases B) sale; fall; increases C) purchase; fall; decreases D) sale; rise; decreases 17) If the Fed makes an open market ________ of government securities, the federal funds rate ________ and the immediate impact is to shift the aggregate ________ curve. A) purchase; falls; demand B) sale; falls; demand C) sale; rises; supply...

16) If the Fed makes an open market ________ of government securities, the federal funds rate...

16) If the Fed makes an open market ________ of government securities, the federal funds rate will ________ as the quantity of money ________. A) purchase; rise; increases B) sale; fall; increases C) purchase; fall; decreases D) sale; rise; decreases 17) If the Fed makes an open market ________ of government securities, the federal funds rate ________ and the immediate impact is to shift the aggregate ________ curve. A) purchase; falls; demand B) sale; falls; demand C) sale; rises; supply...

The mortgage backed securities issued by Freddie and Fannie are fully backed by the Federal government.

Question

Which of the following risk premiums apply to both corporate securities and federal government securities? a.Default...

Solutions

Expert Solution

Related Solutions

Long term corporate bonds would contain which of the following risk premiums. Inflation Premium Default Risk...

Does the market perception of risk free apply to all aspects of the U.S. government securities...

What is meant by “risk premium”? Risk premiums on corporate bonds are usually anticyclical; that is,...

i. Which of the following is true of corporate risk? a. It is the risk that...

Which of the following is primarily a function of the federal government?

Of the following examples, which is associated with government spending for investment? The federal government spends...

Which of the following is/are NOT corporate monitors? A. Lenders B. Security analysts C. Securities and...

16) If the Fed makes an open market ________ of government securities, the federal funds rate...

16) If the Fed makes an open market ________ of government securities, the federal funds rate...

The mortgage backed securities issued by Freddie and Fannie are fully backed by the Federal government.