Holding Other Factors Constant, the Interest-Rate Risk of a Coupon

question 53

Multiple Choice

Holding other factors constant, the interest-rate risk of a coupon bond is higher when the bond's

• A)term to maturity is lower.
• B)coupon rate is lower.
• C)yield to maturity is higher.
• D)term to maturity is lower and yield to maturity is higher.

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Definitions:

Prototype

An original model or initial version of something from which other forms are copied or developed.

Penguin

A flightless seabird native to the Southern Hemisphere, particularly known for its distinctive black and white plumage.

Goose

A waterfowl of the family Anatidae, known for its long neck, webbed feet, and often migratory behavior.

Ostrich

The largest living bird species, native to certain large areas of Africa, known for its speed and ability to lay large eggs.