Bonds with Lower Coupon Rates Have a Shorter Duration Than

question 2

True/False

Bonds with lower coupon rates have a shorter duration than similar bonds with high coupon rates.

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Definitions:

Increasing Marginal Utility

A situation in which each additional unit of a good or service consumed provides more utility or satisfaction than the previous one.

Diminishing Marginal Utility

The economic principle stating that as a person consumes more of a good, the additional satisfaction gained from each additional unit of that good decreases.

Risk-Averse

A condition where an individual prefers outcomes with known probabilities over outcomes with unknown probabilities, typically avoiding higher risk.

Total Utility

The cumulative satisfaction or pleasure derived by a consumer from consuming a given amount of goods or services.