CFA Practice Question

There are 147 practice questions for this study session.

CFA Practice Question

Market evidence shows that:

A. Short holding period returns on short-maturity bonds most often are less than those on long-maturity bonds.
B. Forward rates are upwardly biased predictors of future spot rates.
C. Different maturity strategies have the same expected return.
Correct Answer: C

A is consistent with the local expectations theory. B is consistent with liquidity preference theory.

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