All Else Equal, Which Bond Will Tend to Have the Most

question 166

Multiple Choice

All else equal, which bond will tend to have the most stable market value if interest rates fluctuate?

• A) Zero coupon, short-term bond.
• B) Floating-rate, short-term bond.
• C) Long-term, low coupon bond.
• D) AAA rated, intermediate term bond.
• E) Canadian Government bond.

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Definitions:

Physical Availability

The degree to which a product or service can be obtained by the consumer, often relating to its distribution, placement, and stock levels in the marketplace.

Actor-Observer Effect

A cognitive bias in which people tend to attribute their own actions to external factors and others' actions to their personality or disposition.

Self-Serving Bias

A common tendency for individuals to attribute their successes to personal characteristics, while attributing their failures to external factors.

Proximity

The physical or psychological closeness between people, often influencing attraction and relationships.