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Free ICBRR Exam Braindumps
International Certificate in Banking Risk and Regulation (ICBRR) Questions 96–100 (page: 21)

Updated On: 10-Feb-2026
Page 21 of 70
PDF with 342 Questions

What is generally true of the relationship between a bond's yield and it's time to maturity when the yield curve is upward sloping?

  1. The longer the time to maturity of the bond, the lower its yield.
  2. The longer the time to maturity of the bond, the higher its yield.
  3. The shorter the time to maturity of the bond, the higher its yield.
  4. There is no relationship between the two

Answer(s): B



What is the explanation offered by the liquidity preference theory for the upward sloping yield curve shape?

  1. The long term rates must rise enough to get some borrowers to borrow short-term and some lenders to lend long-term.
  2. The long term rates must rise enough to get some borrowers to borrow long-term and some lenders to lend short-term.
  3. The short term rates must rise enough to get some borrowers to borrow short-term and some lenders to lend long-term.
  4. The short term rates must fall enough to get some borrowers to borrow long-term and some lenders to lend short-term.

Answer(s): A



Which one of the following changes would typically increase the price of a fixed income instrument, such as a bond?

  1. Decrease in inflation rates in a country.
  2. Increase in time to maturity.
  3. Increase in risk premium.
  4. Increase in demand for goods and services.

Answer(s): A



Changes to which one of the following four factors would typically not increase the cost of credit?

  1. Increasing inflation rates in a country.
  2. Increase in consumption of goods and services.
  3. Higher risk premium on a fixed income instrument.
  4. Higher return earned on alternative investments.

Answer(s): C



Which of the following factors would typically increase the credit spread?

I) Increase in the probability of default of the issuer.
II) Decrease in risk premium.
III) Decrease in loss given default of the issuer.
IV) Increase in expected loss.

  1. I
  2. II and III
  3. I and IV
  4. I, II, and IV

Answer(s): C



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