If the Required Return on a Bond Does Not Change

question 291

Multiple Choice

If the required return on a bond does not change from one year to the next, then ____________ over the same period (Ignore changes in default risk) .

• A) The price of a perpetual bond will rise.
• B) The price of a premium bond will rise.
• C) The price of a discount bond will fall.
• D) The price of a bond selling at par will remain unchanged.
• E) The price of a convertible bond will rise.

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Definitions:

Fiedler's Contingency Theory

A leadership theory proposing that effective leadership depends on a match between the leader's style of interacting with subordinates and the degree of control and influence in the situation.

Task Structure

The degree to which job and task roles are defined, organized, and executed within an organization, affecting clarity and efficiency.

Delegating Style

A management approach where authority and tasks are transferred to lower-level employees, promoting responsibility and decision-making at all levels.

Hersey-Blanchard

A situational leadership model proposing that effective leadership is dependent on the task readiness of the followers.