The Price Sensitivity of a Bond to a Given Change

question 67

True/False

The price sensitivity of a bond to a given change in interest rates is generally greater the longer the bond's remaining maturity.

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Definitions:

Interest Allowance

An amount allowed for interest, which can refer to the interest expense permitted on debt or the interest credited to an account; specifics can vary based on context.

Invested Capital

The total amount of money that shareholders and debt holders have invested in a company.

Capital Equity

The amount of money that would be returned to shareholders if all of the assets were liquidated and all of the company's debts were paid off.

Partnership Contract

A legal agreement between partners that outlines the terms and conditions of their business relationship.