An Equal Decrease in All Bond Interest Rates

question 105

Multiple Choice

An equal decrease in all bond interest rates

• A)increases the price of a five-year bond more than the price of a ten-year bond.
• B)increases the price of a ten-year bond more than the price of a five-year bond.
• C)decreases the price of a five-year bond more than the price of a ten-year bond.
• D)decreases the price of a ten-year bond more than the price of a five-year bond.

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Definitions:

Blackjack

A casino card game where players attempt to reach a hand value as close to 21 as possible without exceeding it.

Standard Deviation

A statistical measure that quantifies the variation or dispersion of a set of data values.

Risk-averse

Refers to the preference of an individual or entity to avoid risk rather than facing it, often choosing options with more predictable and less risky outcomes.

Expected Income

The amount of money one anticipates earning over a certain period, factoring in various possible outcomes.