Which of the Following Statements Is CORRECT

question 9

Multiple Choice

Which of the following statements is CORRECT?

• A)You hold two bonds.One is a 10-year, zero coupon, issue 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 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.
• 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:

United States

A federal republic composed of 50 states, a federal district, five major self-governing territories, and various possessions.

Disparate-Treatment Discrimination

A form of discrimination in which an employee or job applicant is treated unfavorably because of their race, color, national origin, sex, or religion in comparison to others.

Disparate-Impact Discrimination

Unintentional discrimination that occurs when a neutral policy disproportionately affects a protected group.

Filing a Claim

The process of formally submitting a request for compensation or remedy for a loss or wrong experienced.