Which One of the Following Combination of Features Causes Bond

question 93

Multiple Choice

Which one of the following combination of features causes bond prices to be the most volatile?

• A) low coupon, short maturity
• B) high coupon, short maturity
• C) low coupon, long maturity
• D) high coupon, long maturity

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Definitions:

Radix

The base of a number system; for example, the radix for the decimal system is 10.

Square Root

An amount which yields the initial number when squared.

Square Inches

A unit of area measurement for two-dimensional space, equivalent to the area of a square with sides of one inch.

Domain

The set of all possible input values for which a given function is defined.