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.

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Definitions:

Inventory Sold

The cost of goods that have been sold from the inventory over a specific period, which is used to calculate the cost of goods sold.

Cash Coverage Ratio

A financial metric that measures a company's ability to cover its debt obligations with its cash and cash equivalents.

Net Income

The profit or loss of a company after all revenues, expenses, taxes, and costs have been subtracted from total revenue.

Income Tax Expense

The total amount of income tax that a company is obligated to pay to federal, state, and local tax authorities.