Which of the Following Is Generally True of Bonds

question 68

Multiple Choice

Which of the following is generally true of bonds?

• A) The only bond whose return equals the initial yield to maturity is one whose time to maturity is the same as the holding period.
• B) A rise in interest rates is associated with a fall in bond prices, resulting in capital gains on bonds whose terms to maturity are longer than the holding periods.
• C) The longer a bond's maturity, the smaller is the size of the price change associated with an interest rate change.
• D) Prices and returns for short-term bonds are more volatile than those for longer-term bonds.

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