An Equal Increase in All Bond Interest Rates

question 96

Multiple Choice

An equal increase in all bond interest rates

• A)increases the return to all bond maturities by an equal amount.
• B)decreases the return to all bond maturities by an equal amount.
• C)has no effect on the returns to bonds.
• D)decreases long-term bond returns more than short-term bond returns.

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Definitions:

Stroboscopic Motion

An optical illusion where discrete images appear to be moving due to rapid sequential presentation, similar to motion pictures.

Milliseconds

Units of time equal to one thousandth (1/1000) of a second, often used to measure very short time intervals.

Vertical Lines

Lines that run straight up and down, creating a sense of height and structure within a visual composition.

Shepard's Table Illusion

A visual illusion where two tables appear to be different shapes but are in fact identical; highlighting how context can influence perception.