Which of the Following Statements Is CORRECT

question 64

Multiple Choice

Which of the following statements is CORRECT?

• A) 10-year,zero coupon bonds have more reinvestment risk than 10-year,10% coupon bonds.
• B) A 10-year,10% coupon bond has less reinvestment risk than a 10-year,5% coupon bond (assuming all else equal).
• C) The total (rate of)return on a bond during a given year is the sum of the coupon interest payments received during the year and the change in the value of the bond from the beginning to the end of the year,divided by the bond's price at the beginning of the year.
• D) The price of a 20-year,10% bond is less sensitive to changes in interest rates than the price of a 5-year,10% bond.
• E) A $1,000 bond with $100 annual interest payments that has 5 years to maturity and is not expected to default would sell at a discount if interest rates were below 9% and at a premium if interest rates were greater than 11%.

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Definitions:

Stereotypes Use

The application or employment of generalized beliefs or assumptions about individuals based on their membership in certain groups.

Stigma Consciousness

The awareness individuals have of the stereotypes and negative judgments that others may hold about them, influencing their behavior and self-esteem.

Master Status

A primary identifying characteristic of an individual that overshadows other social positions or roles they may hold.

Stereotype Threat

The risk of confirming negative stereotypes about an individual's racial, gender, or cultural group which can impair their performance.