Which One of the Following Statements Is Correct According to Malkiel's

question 73

Multiple Choice

Which one of the following statements is correct according to Malkiel's Theorems?

• A)For a given change in a bond's yield to maturity, the shorter the term to maturity, the greater will be the magnitude of the change in the bond's price.
• B)The price of an outstanding bond is unaffected by changes in market interest rates.
• C)The size of the change in a bond's price increases at a constant rate given ratable incremental increases in a bond's yield to maturity even as the term to maturity lengthens.
• D)For a given change in a bond's yield to maturity, the absolute magnitude of the resulting change in the bond's price is directly related to the bond's coupon rate.
• E)For a given absolute change in a bond's yield to maturity, a decrease in yield will cause a greater change in the bond's price than will an increase in yield.

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