UNY BMICC FN8100 xDFNB 100 Topic 1 Practi x Yahoo 1 t/Downloads/RO1%20self-test%20A.pdf xS are traded in capital m c. 3.5% d, 70% 35. Which of the following is not a source of risk? a. liquidity risk b. deferred consumption risk c. maturity risk d. default risk 36. The interest rates we observe in the economy differ from the risk-free rate because of the real rate of interest. a b. diversification. risk premiums d. c. all the above 37. The following yields on 20-year bonds were quoted recently The bond of a very strong company The bond of a moderately strong company The bond of a relatively weak company 8% 10% 15% The difference in yields is due primarily to a. maturity risk premium b. default risk premium e seniority risk premium d. financial risk premium The nominal interest rate on a loan a. never equals its real interest. b. exceeds the real interest rate by a default risk premium. c. differs from the real interest rate by an inflation premium d cannot by directly observed 38. The maturity risk premium reflects a preference by many lenders for a shorter maturities b. reducing yields c. high yield securities d longer maturities 39