Comparing Long-Term Bonds with Short-Term Bonds,long-Term Bonds Are ________ Volatile

question 3

Multiple Choice

Comparing long-term bonds with short-term bonds,long-term bonds are ________ volatile and therefore experience ________ price change than short-term bonds for the same interest rate shift.

• A)less; less
• B)less; more
• C)more; more
• D)more; less
• E)more; the same

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Definitions:

Historical Cost

The original monetary value of an asset or transaction, based on the actual amount paid or incurred at the time of acquisition, without adjusting for inflation or changes in market value.

Carrying Value

The book value of assets and liabilities as represented on the balance sheet, considering factors like depreciation or amortization.

Recoverable Amount

The recoverable amount is the greater value between an asset's net selling price and its value in use, indicating the potential value that can be recovered from an asset over time.

Impairment Loss

A reduction in the recoverable amount of a fixed asset or goodwill below its book value, recognized as an expense in the income statement.