Two Bonds of Equal Risk Are for Sale on the Secondary

question 41

Multiple Choice

Two bonds of equal risk are for sale on the secondary bond market. The two bonds have the same face value, and both mature in 10 years. Bond A pays $10 per year and bond B pay $15 per year. Which bond will sell for a higher price?

• A) Bond A
• B) Bond B
• C) They will sell for the same price.
• D) The relative prices will depend on the expected interest rate over the next 10 years.

---

Definitions:

Goal Fulfillment

The achievement of predefined objectives, personal aspirations, or targets, often resulting in satisfaction or a sense of accomplishment.

Self-Actualization Needs

The highest level in Maslow's hierarchy of needs, representing the fulfillment of personal potential and self-realization.

Consumer Involvement

Refers to the degree of interest and engagement a consumer has with a product or service, influencing their purchasing decisions.

Novel Stimuli

New or unfamiliar objects, events, or situations that attract attention and may elicit responses from an individual or a system.