Which of the Following Statements Is CORRECT

question 13

Multiple Choice

Which of the following statements is CORRECT?

• A) The time to maturity does not affect the change in the value of a bond in response to a given change in interest rates.
• B) You hold two bonds.One is a 10-year, zero coupon, bond and the other is a 10-year bond that pays a 6% annual coupon.The same market rate, 6%, applies to both bonds.If the market rate rises from the current level, the zero coupon bond will experience the smaller percentage decline.
• C) The shorter the time to maturity, the greater the change in the value of a bond in response to a given change in interest rates.
• D) The longer the time to maturity, the smaller the change in the value of a bond in response to a given change in interest rates.
• E) You hold two bonds.One is a 10-year, zero coupon, issue and the other is a 10-year bond that pays a 6% annual coupon.The same market rate, 6%, applies to both bonds.If the market rate rises from the current level, the zero coupon bond will experience the larger percentage decline.

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Definitions:

Marx

Refers to Karl Marx, a 19th-century philosopher, economist, and revolutionary, best known for his theories about capitalism and communism.

Weber

Max Weber, a German sociologist, philosopher, and political economist known for his theories on the structure of society, bureaucracy, and the nature of authority.

Status Attainment Model

A sociological perspective that explains an individual's position within society based on educational achievement, occupational status, and other factors.

Blau and Duncan

Sociologists who developed the Blau-Duncan model, which outlines the structural factors influencing occupational mobility and stratification in society.