14. The ________________ is called the interest rate risk premium.

difference between the coupon rate and the current yield

difference between the yield to maturity and the current yield

difference between the market interest rate and the coupon rate

compensation investors demand for accepting interest rate risk

additional compensation paid to investors to offset rising prices

15. A monthly interest rate expressed as an annual rate would be an example of which one of the following rates?

consolidated monthly rate

discounted annual rate

stated rate

effective annual rate

periodic monthly rate

16. For the two-stage dividend growth model:

R must be less than G₁ but greater than G₂.

P_t = D_t/R.

G₁ can be greater than R.

G₁ cannot be negative.

G₁ must be greater than G₂.

17. U.S. government bonds __________________________

pay interest that is exempt from federal income taxes.

are considered to be free of default risk.

are called "munis".

are considered to be free of interest rate risk.

generally have higher coupons than those issued by an individual state.