Which of the Following Statements Is CORRECT

question 1

Multiple Choice

Which of the following statements is CORRECT?

• A) You hold two bonds,a 10-year,zero coupon,issue and a 10-year bond that pays a 6% annual coupon.The same market rate,6%,applies to both bonds.If the market rate rises from its current level,the zero coupon bond will experience the larger percentage decline.
• B) The time to maturity does not affect the change in the value of a bond in response to a given change in interest rates.
• C) You hold two bonds.One is a 10-year,zero coupon,bond and the other is a 10-year bond that pays a 6% annual coupon.The same market rate,6%,applies to both bonds.If the market rate rises from the current level,the zero coupon bond will experience the smaller percentage decline.
• D) The shorter the time to maturity,the greater the change in the value of a bond in response to a given change in interest rates,other things held constant.
• E) The longer the time to maturity,the smaller the change in the value of a bond in response to a given change in interest rates.

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Definitions:

Cohesive Group

indicates a group characterized by strong bonds and unity among its members, often leading to improved cooperation and performance.

Informal Group

A group formed naturally by individuals within an organization based on personal relationships or shared interests rather than structured, official assignments.

Productive Work

Activities or tasks that contribute to the creation of goods or services and have economic value.

Group Attractiveness

The overall appeal or desirability of a group to its members, influencing cohesion and retention.