All Else Equal,the ________ the Coupon Rate on a Bond,the

question 66

Multiple Choice

All else equal,the ________ the coupon rate on a bond,the ________ the bond's duration.

• A)higher;longer
• B)higher;shorter
• C)lower;shorter
• D)greater;longer

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Definitions:

Trading

The act of buying, selling, or exchanging financial instruments, such as stocks, bonds, or derivatives, typically in financial markets.

Zero Correlation

A statistical term indicating no linear relationship between two variables, meaning one variable does not predict the movement of the other.

Equity Tranche

The portion of a structured finance instrument that is first to absorb losses and last to receive payments.

Default

Failure to fulfill a legal obligation, especially failure to meet a debt payment or not fulfilling a contract condition.