The term structure of interest rates
A) represents the relationship among the interest rates on bonds that are otherwise similar but that have different maturities.
B) reflects differing tax treatment received by different instruments.
C) always results in an upward-sloping yield curve.
D) usually results in a downward-sloping yield curve.
A
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The number of buyers of sport utility vehicles, SUV, decreases sharply. So the
A) demand curve for SUVs shifts leftward. B) demand curve for SUVs shifts rightward. C) demand curve for SUVs does not shift, nor is there a movement along then demand curve. D) demand curve for SUVs does not shift, but there is a movement downward along it. E) supply curve for SUVs shifts rightward.
The beta for General Motors (GM) is 0.5, the risk-free rate is 4%, and the market return is 9%. What is GM's risk-adjusted discount rate?
A) 4% B) 4.5% C) 6.5% D) 9%