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

question 14

Multiple Choice

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

• A) term to maturity is higher.
• B) coupon rate is lower.
• C) yield to maturity is higher.
• D) term to maturity is higher and coupon rate is lower.
• E) All of the options are correct.

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Definitions:

Prefix

An affix placed before the stem of a word to alter its meaning or create a new word, for example, 'pre-' in 'preview'.

Prefix

An affix placed before a word to modify its meaning.

Abd

An abbreviation frequently used in healthcare and medical imaging to refer to the abdomen or abdominal area.

T

Often represents the abbreviation for 'Tesla,' a unit of measurement for magnetic field strength, or it can indicate 'Thymidine' in molecular biology.