Which of the Following Statements Is CORRECT

question 53

Multiple Choice

Which of the following statements is CORRECT?

• A) All else equal, an increase in interest rates will have a greater effect on the prices of short-term than long-term bonds.
• B) All else equal, an increase in interest rates will have a greater effect on higher-coupon bonds than it will have on lower-coupon bonds.
• C) If a bond's yield to maturity exceeds its coupon rate, the bond's price must be less than its maturity value.
• D) If a bond's yield to maturity exceeds its coupon rate, the bond's current yield must be less than its coupon rate.
• E) If two bonds have the same maturity, the same yield to maturity, and the same level of risk, the bonds should sell for the same price regardless of the bond's coupon rates.

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Definitions:

Attachment

The emotional bond that develops between a child and a caregiver, forming the basis for relationships later in life.

Caregiver

An individual who provides care for another person, typically a family member or patient, who is in need of assistance due to age, illness, or disability.

Socioemotional Processes

The development and regulation of emotions and social interactions.

Biological Processes

Natural procedures or functions that are characteristic of living organisms, including growth, reproduction, and metabolism.