Which of the Following Statements Is CORRECT

question 46

Multiple Choice

Which of the following statements is CORRECT?

• A) All else equal,high-coupon bonds have less reinvestment risk than low-coupon bonds.
• B) All else equal,long-term bonds have less price risk than short-term bonds.
• C) All else equal,low-coupon bonds have less price risk than high-coupon bonds.
• D) All else equal,short-term bonds have less reinvestment risk than long-term bonds.
• E) All else equal,long-term bonds have less reinvestment risk than short-term bonds.

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Definitions:

Legal Problem

Refers to an issue or dispute that involves laws, regulations, or the need for legal proceedings or advice.

Dishonor

The refusal or inability to pay a bill of exchange, promissory note, or another financial instrument when it is presented for payment.

Refusal to Pay

The act of not fulfilling a financial obligation or payment when due, often leading to legal consequences.

Negotiable Instrument

A legal document guaranteeing the payment of a specified amount of money, either on demand or at a set time, with the name of the payee that can be transferred by endorsements.