金融市场与机构Madura第九版题库ch03.doc

Chapter 3 Structure of Interest Rates 1. In general, securities with ____________ characteristics will offer _________ yields. A) favorable; higher B) favorable; lower C) unfavorable; lower D) none of the above ANSWER: B 2. Default risk is likely to be highest for A) shortterm Treasury securities. B) AAA corporate securities. C) longterm Treasury securities. D) BBB corporate securities. ANSWER: D 3. Some financial institutions such as commercial banks are required by law to invest only in A) junk bonds. B) corporate stock. C) Treasury securities. D) investment-grade bonds. ANSWER: D 4. Credit ratings are most commonly used to indicate which financial institutions have available funds that they can lend to borrowers. A) True B) False ANSWER: A 5. If a security can easily be converted to cash without a loss in value, it A) is liquid. B) has a high aftertax yield. C) has high default risk. D) is illiquid. ANSWER: A 6. Securities that offer ________ liquidity will offer a _________ yield to be preferred. A) lower; higher B) lower; lower C) higher; higher D) B and C ANSWER: A 7. If all other characteristics are similar, ______ would have to offer ______. A) taxable securities; a higher aftertax yield than taxexempt securities B) taxable securities; a higher beforetax yield than taxexempt securities C) taxexempt securities; a higher aftertax yield than taxable securities D) taxexempt securities; a higher beforetax yield than taxable securities ANSWER: B 8. Assume an investor’s tax rate is 25 percent.? The beforetax yield on a security is 12 percent.? What is the aftertax yield? A) 16.00 percent B) 9.25 percent C) 9.00 percent D) 3.00 percent E) none of the above ANSWER: C 9. An investor’s tax rate is 30 percent.? What must the beforetax yield on a security be to have an aftertax yield of 11 percent? A) 7.7 percent B) 15.71 percent C) 130 percent D) 11.00 percent E) none of the above ANSWER: B 10. A firm in th