Which of the Following Statements Is CORRECT

question 35

Multiple Choice

Which of the following statements is CORRECT?

• A)10-year, zero coupon bonds have higher reinvestment rate risk than 10-year, 10% coupon bonds.
• B)A 10-year, 10% coupon bond has less reinvestment rate risk than a 10-year, 5% coupon bond (assuming all else equal).
• C)The total return on a bond during a given year is the sum of the coupon interest payments received during the year and the change in the value of the bond from the beginning to the end of the year.
• D)The price of a 20-year, 10% bond is less sensitive to changes in interest rates than the price of a 5-year, 10% bond.
• E)A $1,000 bond with $100 annual interest payments that has 5 years to maturity and is not expected to default would sell at a discount if interest rates were below 9% and at a premium if interest rates were greater than 11%.

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Definitions:

Anthropology Project

A research or study undertaking within the field of anthropology, aimed at exploring human societies, cultures, and biological characteristics.

Intrinsic Motivation

An internal drive to take action for the pure enjoyment or satisfaction derived from the activity itself, rather than for some separate consequence.

External Incentives

Rewards or punishments that come from an external source, intended to motivate behavior.

Teacher-directed

An educational approach where the teacher is the primary source of knowledge and structure, guiding the students through the curriculum in a systematic way.