The Actual Relationship Reflecting the Response of a Bond's Price

question 72

Multiple Choice

The actual relationship reflecting the response of a bond's price to a change in bond yields is

• A)concave.
• B)convex.
• C)linear.
• D)quadratic.

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Definitions:

Surplus (Deficit)

A financial situation where income exceeds expenditures (surplus) or expenditures exceed income (deficit) over a given period.

Unrealized Intercompany Profits

Profits that result from transactions between parent and subsidiary companies that have not yet been realized through sales to external parties.

Equity Method

An accounting technique used by companies to record their investments in other companies, adjusting the investment for the investor's share of the investee's profits or losses.

Consolidated Inventory

The total value of all inventories held by a parent company and its subsidiaries, accounted for in a consolidated financial statement.