According to the market segmentation theory of the term structure of interest rates

a.

The slope of the yield curve becomes flatter as the supply of securities decreases in the short-term market and increases in the long-term market

b.

Investors are indifferent between securities of different maturities

c.

The slope of the yield curve becomes flatter as the supply of securities decreases in the short-term market and decreases in the long-term market

d.

The preference for particular maturities can affect the prices and yields of securities with different maturities and therefore the shape of the yield curve

A five-year commercial and industrial loan made by a commercial bank is the bank's

a.

liability

b.

asset

c.

current liability

d.

equity

e.

current asset

Which of the following bond types pays interest that is exempt from federal taxation?

Select one:

a.

Municipal bonds and Treasury bonds

b.

Corporate bonds

c.

Municipal bonds

d.

Treasury bonds

e.

Convertible bonds