If Interest Rates Fall from 8 Percent to 7 Percent

question 99

Multiple Choice

If interest rates fall from 8 percent to 7 percent, which of the following bonds will have the largest percentage increase in its value?

• A) A 10-year zero coupon bond.
• B) A 10-year bond with a 10 percent semiannual coupon.
• C) A 10-year bond with a 10 percent annual coupon.
• D) A 5-year zero coupon bond.
• E) A 5-year bond with a 12 percent annual coupon.

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Definitions:

Interventricular Septum

The thick wall separating the lower chambers (ventricles) of the heart, preventing the mixing of oxygenated and deoxygenated blood.

AV Bundle

The bundle of His, a collection of heart muscle cells specialized for electrical conduction that transmits the electrical impulses from the AV node to the point of the apex of the fascicular branches.

Bundle Branches

Pathways in the heart's electrical conduction system that transmit impulses to cause coordinated contraction of the ventricles.

Isoelectric Line

The baseline of an electrocardiogram (ECG) where there is no electrical activity in the heart, representing the time between heartbeats.