Which of the Following Statements Is Most Correct

question 107

Multiple Choice

Which of the following statements is most correct?

• A) All else equal, an increase in interest rates will have a greater effect on the prices of long-term bonds than it will on the prices of short-term bonds.
• B) All else equal, an increase in interest rates will have a greater effect on higher-coupon bonds than it will have on lower-coupon bonds.
• C) An increase in interest rates will have a greater effect on a zero coupon bond with 10 years maturity than it will have on a 9-year bond with a 10 percent annual coupon.
• D) All of the statements above are correct.
• E) Answers a and c are correct.

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Definitions:

Reliability

The reliability of an evaluation tool in generating steady and unchanging outcomes over various periods.

Spearman-Brown Formula

A mathematical formula that can be used with split-half or odd-even reliability estimates to increase the accuracy, which is impaired because of the shortening (splitting in half) of the test.

Reliability Estimate

A measure of the consistency of a psychological test or assessment tool across time, items, and raters, indicating its stability and dependability.

Alternate Forms

A method of assessing reliability by administering different versions of an assessment tool to the same group of people and comparing the results.