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Term Premium Refers to

Question 52

Multiple Choice

Term premium refers to


A) the average difference over a long period of the interest rate on long-term bonds and the interest rate on the short-term federal funds rate.
B) the average difference over a long period of the interest rate on short-term financial instruments and the interest rate on the discount rate.
C) the difference between the corporate bond rate and the risk-free rate of Treasury bonds.
D) the difference between prime rate and the discount rate.

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