Which of the Following Is Not True

question 67

Multiple Choice

Which of the following is not true?

• A) Holding other things constant, the duration of a bond increases with time to maturity.
• B) Given time to maturity, the duration of a zero-coupon decreases with yield to maturity.
• C) Given time to maturity and yield to maturity, the duration of a bond is higher when the coupon rate is lower.
• D) Duration is a better measure of price sensitivity to interest-rate changes than is time to maturity.
• E) All of the options are correct.

---

Definitions:

Excess Capacity

The situation where a firm is producing at a lower scale of output than it has been designed to handle, resulting in unused productive capacity.

Source Of Inefficiency

Factors or situations that prevent an economy or system from achieving optimal allocation and utilization of resources, leading to wasted potential.

Product Diversity

The variety of different items that a company produces or that is available in a market.

Long-run Equilibrium

A state in which all factors of production and costs are variable, and all economic actors have fully adjusted to any economic changes, leading to a no-profit, no-loss scenario.