1. Which of the following is CORRECT?
Bonds represent an ownership contract.
Stocks are contracts which describe corporate ownership.
Stocks are contracts with a required return.
None of the above.
Stocks are contracts which describe dividend payments.
2. Which of the following is NOT true:
A steep yield-curve occurs when long-term interest rates are much higher than short-term interest rates.
A steep yield-curve indicates that investors anticipate rapid economic growth.
Because long-term bonds are riskier than short-term bonds, a downward sloping yield curve is not possible.
When the economy is healthy, the yield on long-term bonds is often slightly higher than on short-term bills.
None of these.