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8/24/2020 Practice Quiz M4 (Ungraded)

My courses ▶ (20/07) MScFE 560 Financial Markets (C20-S3)


▶ Module 4: Fixed Income and Bond Markets ▶ Practice Quiz M4 (Ungraded)

Started on Monday, 24 August 2020, 11:03 PM


State Finished
Completed on Monday, 24 August 2020, 11:08 PM
Time taken 5 mins

Question 1
Complete

Not graded

What information does a yield curve display?

Select one:
Yields-to-maturities across zero-coupon bonds of differing issuers
Yields-to-maturities across coupon-bearing bonds of differing
maturities/terms
None of the above.

Yields-to-maturities across zero-coupon bonds of differing


maturities/terms

Your answer is correct.

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8/24/2020 Practice Quiz M4 (Ungraded)

Question 2

Complete

Not graded

Why are bond markets considered ef cient?

Select one:
Credit rating agencies ensure up-to-date information on the default
probabilities of bond-issuing entities.
Investors react quickly to new information about the probability of default
of bond-issuing entities.
Strict regulations ensure transparent and orderly trading behavior.
Fixed-income investments are low in risk, allowing investors to focus on
pro t and ef ciency.

Your answer is incorrect.

Question 3

Complete
Not graded

Consider the following statements:

Statement A: New information about an entity’s default probability is


incorporated into its bond prices rapidly.
Statement B: Par values of defaultable bonds are discounted more than
par values of non-defaultable bonds.

Which of the statements given above is correct?

Select one:
Only statement B
Both statement A and B
Only statement A
Neither statement A nor B

Your answer is incorrect.

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8/24/2020 Practice Quiz M4 (Ungraded)

Question 4

Complete

Not graded

What is the central function of bond markets?

Select one:
To allow investors to access capital by purchasing bonds
To allow investors to borrow money

To allow businesses to lend money by issuing bonds


To allow businesses to access debt-based funding by issuing bonds to
investors

Your answer is correct.

Question 5
Complete

Not graded

Consider the following statements:

Statement A: Investors in the bond markets would prefer future in ation


to be low.
Statement B: Currency risk can be important because the currency
market can be highly illiquid.

Which of the statements given above is correct?

Select one:
Neither statement A nor B
Both statement A and B
Only statement B

Only statement A

Your answer is incorrect.

https://masters.wqu.org/mod/quiz/review.php?attempt=239316&cmid=44414 3/4
8/24/2020 Practice Quiz M4 (Ungraded)

◄ Notes 4 M4
Jump to...

Live Session M4 ►

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