Spreading risk differs from hedging risk because O A. Only hedging can reduce systematic risk. O B. Only spreading can reduce systematic risk. O C. Hedging requires assets with opposing returns (negative correlation), while spreading only requires assets with low correlation of returns. D. Spreading requires assets with opposing returns negative correlation while hedging only requires assets with low correlation of returns. Under the expectations theory of the term structure O A. the yield curve should usually be downward sloping. O B. the slope of the yield curve depends on the expectations for future short term rates. C. the slope of the yield curve should be close to flat O D. The slope of the yield curve reflects the expectations for future short term rates and a risk premium associated with longer term bonds. Which of the following statements about the US Treasury yield curve is correct? O A. The yield curve usually slopes upward O B. The yield curve usually has a positive slope at first then becomes inverted C. The yield curve shows the relationship among securities of different maturities over time O D. The yiald curve slope does not change over time Suppose that interest rates are expected to remain unchanged over the next few years. Under the liquidity premium theory, the yield curve should be O A. Flat B. Upward sloping C. Inverted O D.Vertical During 2001, the Yen/ exchange rate rose from 117 Yen/ to 127 Yen/S. This meant that O A. the yen had depreciated and the dollar has appreciated. O B. the yen had appreciated and the dollar has depreciated. O C.U.S exports became cheaper in Japan. O D. Both a and c. O E. Both b and c. From 2005-2007 the USS/Euro exchange rate rose from 1.22 to 1.35. This means that O A. the euro has depreciated and the dollar has appreciated. O B. the euro has appreciated and the dollar has depreciated. O c.U.S exports are cheaper in Europe. O D. Both a and c. O E. Both b and c. in the U.s. It is widely believed that China intervenes in foreign exchange markets to keep the yuan_against the U.S. dollar, in order to keep Chinese exports to the United States O A. Weaker, cheaper O B. Stronger, cheaper C. Weaker, more expensive O D. Stronger, more expensive If real interest rates in Europe are higher than those in the US O A. The supply of dollars decreases and the dolar depreciates. O B. The demand for dollars decreases and the dollar depreciates. O C. The demand for dollars increases and the dollar appreciates. O D. The supply of dollars increases and the dollar appreciates