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For two bonds with the same maturity and with the same required yield, the lower the coupon rate, the greater the price responsiveness for a given change in the required yield. This is an example of ________ affecting a bond's price sensitivity.
Fiat Money
Money not redeemable for any commodity; its status as money is conferred initially by government decree but eventually by common experience.
Fiat Money
Currency that has value and is legally recognized for transactions solely because of a government decree, without backing by a physical commodity.
Fractional Reserves
A banking system in which banks hold a fraction of their depositors' funds in reserve, lending out the remainder to earn interest.
Opportunity Cost
The loss of potential gain from other alternatives when one alternative is chosen, representing the benefits an individual, investor, or business misses out on when choosing one option over another.
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