Which of the Following Are Generally TRUE of Bonds

question 5

Multiple Choice

Which of the following are generally TRUE of bonds?

• A)A bond's return equals the yield to maturity when the time to maturity is the same as the holding period.
• B)A rise in interest rates is associated with a fall in bond prices,resulting in capital gains on bonds whose terms to maturity are longer than the holding periods.
• C)The longer a bond's maturity,the smaller is the size of the price change associated with an interest rate change.
• D)Prices and returns for short-term bonds are more volatile than those for longer-term bonds.

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Product and Service Mix

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