The Prices of Bonds with ____ Are Most Sensitive to Interest

question 13

Multiple Choice

The prices of bonds with ____ are most sensitive to interest rate movements.

• A) high coupon payments
• B) zero coupon payments
• C) small coupon payments
• D) none of the above (The size of the coupon payment does not affect the sensitivity of bond prices to interest rate movements.)

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Definitions:

Section 29

Without additional context, this is too vague, but it could refer to a specific section of a law or regulation depending on the context.

Ambiguous

Lacking clear definition or boundaries, open to more than one interpretation or understanding.

Plain Language

Writing designed to ensure the reader understands as quickly, easily, and completely as possible.

Bilateral Contract

An agreement between two parties where each promises to perform an act in exchange for the other party's act.