Which of the Following Statements Is Most Correct

question 65

Multiple Choice

Which of the following statements is most correct?

• A) A 10-year bond would have more interest rate risk than a 5-year bond, but all 10-year bonds have the same interest rate risk.
• B) A 10-year bond would have more reinvestment rate risk than a 5-year bond, but all 10-year bonds have the same reinvestment rate risk.
• C) If their maturities were the same, a 5 percent coupon bond would have more interest rate risk than a 10 percent coupon bond.
• D) If their maturities were the same, a 5 percent coupon bond would have less interest rate risk than a 10 percent coupon bond.
• E) Zero coupon bonds have more interest rate risk than any other type bond, even perpetuities.

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Definitions:

Behaviourally Anchored Rating Scale (BARS)

A method used for appraising the performance of employees, involving specific examples of effective or ineffective job behaviors.

Performance Achievement

The process of meeting and exceeding set performance standards or goals within an organization.

Expected Behaviours

The conduct or actions that an organization anticipates from its employees, based on its values, policies, and culture.

Critical-Incident Technique

A method used in management and training to collect direct observations of human behavior to identify events that lead to success or failure.