An Equal Increase in All Bond Interest Rates

question 96

Multiple Choice

An equal increase in all bond interest rates

• A)increases the return to all bond maturities by an equal amount.
• B)decreases the return to all bond maturities by an equal amount.
• C)has no effect on the returns to bonds.
• D)decreases long-term bond returns more than short-term bond returns.

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Definitions:

Positive

Referring to a condition or quantity that is more than zero, often associated with good or desirable outcomes.

Negative

A term often used to describe a decrease, a downward trend, or harmful effects in various contexts, including finance, health, and environmental studies.

Straight Line

In mathematics and geometry, the shortest path between two points without any curvature.

Constant

A value that does not change and remains fixed within a given context or equation.