Which One of the Following Is Correct Concerning Bond Prices

question 64

Multiple Choice

Which one of the following is correct concerning bond prices?

• A) All else equal, a 12% bond will sell at a higher price than a 10% bond.
• B) The price of a short-term bond is more sensitive to interest rate changes than the price of a Long-term bond.
• C) The price of a zero-coupon bond is less sensitive to interest rate changes than the price of a coupon bond.
• D) Bond prices tend to fluctuate more the less time to maturity.
• E) Movements in bond prices are directly related to movements in the market rate of interest.

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Definitions:

Securities Fraud

Illegal practices involving the deception of investors or manipulation of financial markets, often leading to financial loss for investors.

Organizational Control

The processes, structures, and guidelines put in place within an organization to guide the behavior of its members and achieve its objectives.

Business Ethics

The study and examination of moral and ethical problems that arise in a business environment, guiding the behavior of individuals and organizations.