Which of the Following Two Bonds Is More Price Sensitive

question 24

Multiple Choice

Which of the following two bonds is more price sensitive to changes in interest rates? 1) A par value bond, X, with a 5-year year to maturity and a 10% coupon rate.
2) A zero-coupon bond, Y, with a 5-year year to maturity and a 10% yield to maturity.

• A) Bond X because of the higher yield to maturity
• B) Bond X because of the longer time to maturity
• C) Bond Y because of the longer duration
• D) Both have the same sensitivity because both have the same yield to maturity.
• E) None of the options are correct.

Define and differentiate between FOB origin pricing and other geographic pricing strategies.

Comprehend the implications and motivations behind promotional allowances.

Understand everyday low pricing (EDLP) strategy and its impact on marketing and pricing tactics.

Explain the concept and calculation of trade-in allowances.

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Definitions:

1960s

A decade that was marked by significant cultural, political, and social change worldwide, including movements for civil rights and freedom.

Thought Processes

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An academic field that studies the biological processes and aspects that underlie cognition, with a specific focus on the neural connections in the brain which are involved in mental processes.

Brain Functions

Refers to the various activities and tasks the brain performs, including cognition, perception, emotion regulation, and coordination of physical movements.