If You Expected Interest Rates to Rise,you Would Prefer to Own

question 31

Multiple Choice

If you expected interest rates to rise,you would prefer to own bonds with

• A) short maturities and low coupons.
• B) long maturities and high coupons .
• C) long maturities and low coupons.
• D) short maturities and high coupons.
• E) none of the above.

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Definitions:

Abstract Principles

Fundamental ideas or theories that are theoretical in nature and not based on specific instances.

Hypothetical Possibilities

Imagined scenarios or conditions that can be considered when reasoning or planning without necessarily having a basis in reality.

Hierarchical Classification

A system of organizing entities into a graded series of levels based on characteristics or criteria, often used in biology for the classification of organisms.

Conservation of Number

A cognitive ability, identified by Piaget, where a child understands that the quantity of a set of items remains the same even if its appearance changes.