1- Financial economists consider the rates. to be the most accurate measure of interest A) simple interest rate B) discount rate C) yield to maturity (YTM) D) real interest rate Cl.02 2- The presence of in financial markets leads to adverse selection and moral hazard problems that interfere with the efficient functioning of financial markets. A) noncollateralized risk B) free-riding C) asymmetric information D) costly state verification CLO 3- If an investor's holding period is longer than the term to maturity of a bond, he or she is exposed to A) interest-rate risk. B) Reinvestment risk. C) bond-market risk. D) yield-to-maturity risk. CLO2 4. A credit market instrument that pays the owner the face value of the security at the maturity date and nothing prior to then is called a A. simple loan. B. fixed-payment loan. C. coupon bond. D. discount bond. CLO2 5- Which of the following $1,000 face value securities has the highest yield to maturity? A) A 5 percent coupon bond selling for $1,000 B) A 10 percent coupon bond selling for $1,000 C) A 12 percent coupon bond selling for $1,000 D) A 12 percent coupon bond selling for $1,100 CLO2