Which of the Following Is Not True About Bonds? in All

question 53

Multiple Choice

Which of the following is not true about bonds? In all of the statements, assume other things are held constant.

• A) Price sensitivity, that is, the change in price due to a given change in the required rate of return, increases as a bond's maturity increases.
• B) For a given bond of any maturity, a given percentage point increase in the interest rate (rd) causes a larger dollar capital loss than the capital gain stemming from an identical decrease in the interest rate.
• C) For any given maturity, a given percentage point increase in the interest rate causes a smaller dollar capital loss than the capital gain stemming from an identical decrease in the interest rate.
• D) From a borrower's point of view, interest paid on bonds is tax-deductible.
• E) A 20-year zero coupon bond has less reinvestment rate risk than a 20-year coupon bond.

Comprehend the impact of labor supply and demand on wage determination.

Understand the principle of diminishing returns and its effect on labor productivity and MRP.

Examine how external factors like market demand for goods influence the demand for labor.

Understand the factors influencing a firm's hiring decisions and how it impacts profit maximization.

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Definitions:

Sensorimotor Intelligence

A stage in Jean Piaget’s theory of cognitive development where infants learn through interacting with their environment using their senses and motor actions.

Primary Reactions

Initial, innate responses or reflexes seen in infants as part of their early developmental stages.

New Adaptation

A process by which individuals or species undergo changes or develop new traits over time to better interact with their environment.

Sensorimotor Behavior

pertains to activities involving both sensory perception and muscular movement, fundamental in early stages of human development.