Which of the Following Statements Is Most Correct

question 69

Multiple Choice

Which of the following statements is most correct?

• A) All else equal, a 1-year bond will have a higher (i.e., better) bond rating than a 20-year bond.
• B) A 20-year bond with semiannual interest payments has higher price risk (i.e., interest rate risk) than a 5-year bond with semiannual interest payments.
• C) 10-year zero coupon bonds have higher reinvestment rate risk than 10-year, 10 percent coupon bonds.
• D) If a callable bond is trading at a premium, then you would expect to earn the yield-to-maturity.
• E) Statements a and b are correct.

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Definitions:

Incentives

External rewards or stimuli that motivate behavior or encourage action towards a desired goal.

Need For Affiliation

A person's desire to create and maintain social relationships and bonds with others.

Peak Experience

A term coined by psychologist Abraham Maslow referring to a state of profound and deeply moving experience where one feels a sense of unity and meaningfulness in life.

Instinct Approach

A perspective in psychology that emphasizes innate, biological drives as the primary motivator for behavior.