单项选择题

Based on the following information to answer questions from 39 to 40:
A mortgage-backed security has been divided into three classes or tranches as follows:
Tranche Ⅰ receives net interest and all the principal payments until it is completely paid off.
Tranche Ⅱ receives its share of net interest and starts receiving all the principal repayments after
Tranche Ⅰ has been completely paid off. Prior to that, it only receives interest payments.
Tranche Ⅲ receives monthly net interest and starts receiving all principal repayments after
Tranches Ⅰ and Ⅱ have been completely paid off. Prior to that, it only receives interest payments. For collateralized mortgage obligations (CMOs) , are prepayment risk and interest rate risk, respectively, different for the various classes (tranches) of bonds Prepayment risk Interest rate risk ①A. NO NO ②B. YES YES ③C. YES NO A. ①B. ②C. ③

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单项选择题Generally speaking, all else being equal, an upward-sloping yield curve can be expected when:

A. inflationary expectations are beginning to subside and investors begin to show a preference for more liquid/less risky short-term securities.
B. the supply of long-term funds falls short of demand and investors begin to show a preference for more liquid/less risky short-term securities.
C. inflationary expectations are beginning to subside.

单项选择题An investor is considering the purchase of two bonds. One of the bonds is tax-exempt and yields 4.5% while the other bond is taxable and yield 6.0%. If the two bonds are alike in all other characteristics, the rate that would make the investor indifferent between the two bonds is closest to:

A. 9.0%.
B. 25.0%.
C. 27.0%.