Wealth-Forum e-zine

Test your understanding of this topic

Q1.

If a fund manager expects the yield curve to steepen, as a short term trading measure, he should

a. Invest in long maturity bonds

b. Invest in short maturity bonds

Q2.

Yield curve strategies are

a. Passively managed

b. Actively managed

c. Both of the above

Q3.

Yield curve enables one to

a. Forecast interest rates

b. Predict the economic activity

c. Price other fixed income instruments such as corporate bonds

d. All of the above

Q4.

Yield curve depicts the relationship between

a. Yields and bond prices

b. Risk and yields

c. Yields and time to maturity

Q5.

A flattening of the yield curve means that the slope of the yield curve has

a. Increased

b. Decreased

c. Increased then decreased