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1.
A bond yield curve that becomes steeper means that future short-term interest rates are predicted to _______.
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Go up. If the curve becomes steeper, future short-term interest rates are predicted to rise.
2.
Current yield is a bond's _______ divided by its current price.
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Annual interest. The current yield is the annual interest divided by the current price.
3.
A bond indicator is _______.
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A measure of a bond's performance. Bond indicators are used to gauge the state of bonds' financial performances.
4.
A bond index is designed to be representative of _______.
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The overall bond market. The bonds chosen are meant to represent the overall bond market.
5.
The lower a bond's letter rating, the lower its default risk.
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False. The lower a bond's letter rating, the higher its default risk.