Bonds represent an ownership contract

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1. Which of the following is CORRECT?

Bonds represent an ownership contract.

Stocks are contracts which describe corporate ownership.

Stocks are contracts with a required return.

None of the above.

Stocks are contracts which describe dividend payments.

2. Which of the following is NOT true:

A steep yield-curve occurs when long-term interest rates are much higher than short-term interest rates.

A steep yield-curve indicates that investors anticipate rapid economic growth.

Because long-term bonds are riskier than short-term bonds, a downward sloping yield curve is not possible.

When the economy is healthy, the yield on long-term bonds is often slightly higher than on short-term bills.

None of these.

Reference no: EM131897541

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