Empirical evidence of liquidity premium indicates

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1. Empirical evidence of liquidity premium indicates

(a) the longer the maturity, the larger the liquidity premium.

(b) they exist for up to one-year maturity.

(c) they only explain flat yield curves.

(d) they don't exist.

(e) they don't exist for declining yield curves.

2. The rate that equates a noncallable bond's future cash flows with the current price is

(a) coupon yield.

(b) yield to call.

(c) actual yield-to-maturity.

(d) current yield.

(e) promised yield-to-maturity.

Reference no: EM132015983

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