All Other Things Equal, Which of the Following Has the Longest

question 9

Multiple Choice

All other things equal, which of the following has the longest duration?

• A) A 20-year bond with a 10% coupon yielding 10%
• B) A 20-year bond with a 10% coupon yielding 11%
• C) A 20-year zero-coupon bond yielding 10%
• D) A 21-year bond with a 10% coupon yielding 10%

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Definitions:

Unique Needs

Specific requirements or preferences that differ among individuals or entities, often necessitating customized solutions.

Economies of Scale

The cost advantages that enterprises obtain due to their scale of operation, with cost per unit of output generally decreasing with increasing scale.

Economies of Scope

Cost advantages that enterprises obtain due to a broad range of products rather than specializing in a single product or service, enabling more efficient use of shared resources.

Routing Flexibility

The ability to adjust and optimize the paths that products take from origin to destination in response to changing conditions or requirements.