The Relationship That Exists Between Bond Maturity and Risk Can

question 21

Multiple Choice

The relationship that exists between bond maturity and risk can be explained through observing that:

• A)The longer the period,the greater the potential for a change in the ability of a company to repay its debt
• B)A broad-based change in interest rates will have a greater effect on long-term bonds
• C)The shorter the period,the greater the potential for a change in the ability of a company to repay its debt
• D)Both a and b
• E)Both b and c

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Definitions:

General Intelligence

A theoretical measure of an individual's overall mental capability as opposed to specific abilities or skills.

Triarchic Intelligence

A theory by Robert Sternberg that intelligence comprises analytical, creative, and practical abilities.

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A condition in which a person otherwise limited in mental ability has an exceptional specific skill, such as in computation or drawing.

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A statistical method used to describe variability among observed, correlated variables in terms of potentially lower number of unobserved variables, called factors.