Which of the Following Bond Pricing Rules Is Incorrect

question 41

Multiple Choice

Which of the following bond pricing rules is incorrect?

• A)Bond prices and interest rates are inversely related
• B)Prices of long-term bonds are less sensitive to changes in interest rates than short-term bonds
• C)Bond price sensitivity increases at a decreasing rate as maturity increases
• D)Bond prices are more sensitive to a decline in market yield to maturity

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Definitions:

Private Ownership

The state or fact of exclusive rights and control over property, which can be either an individual or a corporate entity.

Collaborative Consumption

The practice of sharing, bartering, lending, trading, or renting access to products or services, facilitated by community-based online services.

Private Ownership

The legal possession of property or goods by individuals or corporations, not by the state or public entities.

Cognitive Surplus

The combination of time, technology, and digital connectivity that enables society to contribute to collaborative projects, often leading to significant advancements or creations.