Which of the Following Bonds Is Most Susceptible to Interest

question 49

Multiple Choice

Which of the following bonds is most susceptible to interest rate risk from an investor's perspective?

• A)short-term, high-coupon
• B)short-term, low-coupon
• C)long-term, high-coupon
• D)long-term, zero-coupon

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Definitions:

σ

Denotes the standard deviation in statistics, a measure of the dispersion or variability of a set of values.

Null Hypotheses

A statement or hypothesis set for statistical testing, positing that there is no significant difference or effect.

Alternative Hypotheses

In hypothesis testing, it is the statement that suggests a possible relationship between variables or a difference in groups, contrasting the null hypothesis.

Heart Rate

The number of heartbeats per unit of time, usually expressed in beats per minute (bpm).