QUESTION 19

1. What is the real rate of interest from a Yeagley Corporation bond when the pure rate of interest is 3%, the inflation premium is 4%, and the risk premium is 5%?

   	a.	12.48%.
   	b.	7.12%.
   	c.	9.20%.
   	d.	8.15%.

QUESTION 20

1. The theories of the term structure of interest rates attempt to describe the relationship of interest rates to:

   	a.	The maturity of securities.
   	b.	The risk of securities.
   	c.	The issuer of securities.
   	d.	The market for securities.