Which of the Following Has the Highest Interest Rate Risk

question 176

Multiple Choice

Which of the following has the highest interest rate risk?

• A) a 20-year U.S. Treasury bond
• B) Bendix Corporation six-month commercial paper
• C) a six-month money-market certificate at a federally issued bank
• D) a Southwest Airlines bond maturing in four years

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Definitions:

Commodity Money

Money that has intrinsic value because it is made of materials that hold value, like gold or silver.

Fiat Money

Currency that a government has declared to be legal tender, despite it having no intrinsic value and not being backed by physical commodities.

Intrinsic Value

The inherent worth of an asset, independent of its market price, often based on what is fundamentally valuable about the asset.

Media Of Exchange

Objects or instruments used to facilitate the sale, purchase, or trade of goods between parties.