Use the Following Three Statements to Answer This Question

question 54

Multiple Choice

Use the following three statements to answer this question:
I.The prices of bonds with higher durations are more sensitive to interest rate changes than are those with lower durations.
II.All else being equal, durations will be higher when (1) market yields are lower, (2) bonds have longer maturities, and (3) bonds have lower coupons.
III.Duration is a measure of risk of the bond

• A)I is correct, II, III are incorrect.
• B)I is incorrect, II, III are correct.
• C)I, II and III are correct.
• D)I, II and III are incorrect.

---

Definitions:

Booting

The process by which a computer system starts up, initializing the operating system and hardware before becoming usable.

Computer

An electronic device capable of processing, storing, and displaying data, used for a wide range of tasks, from calculation to internet browsing.

Technique

a specific method or way of doing something, especially one that is well-defined and widely used.

RADAR

An acronym for Radio Detection and Ranging, a system used to detect objects and measure their distance and speed.