The length of time over which a bond promises to make payments to the holder is called which of the following?
A) the term structure of interest rates
B) the face value
C) the yield to maturity
D) the holding period
E) none of the above
Question 2
We would expect which of the following to occur when the central bank pursues contractionary monetary policy?
A) an increase in bond prices and an increase in the interest rate (i)
B) a reduction in bond prices and an increase in i
C) an increase in bond prices and a reduction in i
D) a reduction in bond prices and a reduction in i
E) none of the above
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