Assume That Water Filling a Crack in a Rock Undergoes

question 30

Multiple Choice

Assume that water filling a crack in a rock undergoes cycles of freezing and melting. Which of the following statement is TRUE?

• A)Water shrinks as it freezes, causing the crack walls to be drawn closer together.
• B)Water expands as it freezes, causing the crack walls to be pushed apart.
• C)Water shrinks as it melts, causing the crack walls to be pulled closer together.
• D)Water expands as it melts, causing the crack walls to be pushed apart.

---

Definitions:

Interest Rates

This represents the cost, in percentage terms of the principal, that a borrower incurs from a lender to utilize their assets.

Maturity Risk

The risk of loss to an investor from changes in the price of a bond that arise from changes in the market interest rate. Also called price risk and interest rate risk. The term maturity risk emphasizes the fact that interest-induced price changes are larger with longer maturities.

Bond Prices

The market price for which a bond is bought or sold, influenced by interest rates, credit quality, and other factors.

Interest Rate Movements

Fluctuations in the interest rate over time which can affect borrowing costs and investment returns.