If You Choose a Zero-Coupon Bond with a Maturity That

question 28

Multiple Choice

If you choose a zero-coupon bond with a maturity that matches your investment horizon, which of the following statements is (are) correct?
I. You will have no interest rate risk on this bond.
II. In the absence of default, you can be sure you will earn the promised yield rate.
III. The duration of your bond is less than the time to your investment horizon.

• A) I only
• B) I and II only
• C) II and III only
• D) I, II, and III

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