Topic 8: Fixed Income

Lesson 8.3: The Term Structure And Interest-rate Risk — Quiz

Test your understanding of lesson 8.3: the term structure and interest-rate risk with 5 practice questions.

Practice Questions

Question 1

What does the shape of the yield curve typically indicate about future interest rates?

Question 2

What is the primary use of duration in fixed income analysis?

Question 3

If a bond has a convexity value of 50, what does this imply about its price sensitivity?

Question 4

How is the spot rate related to the forward rate in a normal market?

Question 5

What impact does an increase in interest rates typically have on existing fixed-rate bonds?