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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Definitions:

Dividends Payable

A liability on a company's balance sheet representing the amount of declared dividends that are owed to shareholders but not yet paid.

Retained Earnings

The portion of net income that is retained by the corporation rather than distributed to its owners as dividends.

Date of Payment

Refers to the specific day on which a payment is to be made or received, often relating to bills, debts, or other financial obligations.

Board of Directors

A group of individuals elected by the shareholders of a company to oversee and guide its management and strategies.