Which of the Following Statements Is True

question 119

Multiple Choice

Which of the following statements is true?

• A)An increase in interest rates leads to an increase in the market value of financial securities.
• B)Value of longer term securities decreases at a diminishing rate for increases in interest rates.
• C)Value of longer term securities increases at an increasing rate for any decline in interest rates.
• D)The shorter the maturity of a fixed income asset or liability, the greater the fall in market value for any given interest rate increase.
• E)The longer the maturity of a fixed income asset or liability, the greater the fall in market value for any given interest rate decrease.

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Definitions:

Complements

Goods or services that are used together, where the demand for one item increases the demand for another.

Price Elasticity of Demand

A measure of how much the quantity demanded of a good responds to a change in its price, with higher elasticity indicating a greater response.

DVDs

Digital Versatile Discs, a type of optical storage media used for storing data, including video and audio, now overshadowed by digital streaming services.

Quantity Demanded

Quantity demanded refers to the total amount of a good or service that consumers are willing and able to purchase at a given price level, within a specified period.