Which of the Following Is Generally True of Bonds

question 68

Multiple Choice

Which of the following is generally true of bonds?

• A) The only bond whose return equals the initial yield to maturity is one whose time to maturity is the same as the holding period.
• B) A rise in interest rates is associated with a fall in bond prices, resulting in capital gains on bonds whose terms to maturity are longer than the holding periods.
• C) The longer a bond's maturity, the smaller is the size of the price change associated with an interest rate change.
• D) Prices and returns for short-term bonds are more volatile than those for longer-term bonds.

---

Definitions:

Binge Drinking

The excessive consumption of alcohol in a short period of time, typically with the intention of becoming intoxicated.

Heavy Drinking

Consuming alcohol in excess of moderate drinking guidelines, often leading to health risks and alcohol dependency.

Drinking

The act of consuming liquids, often referring specifically to the ingestion of alcoholic beverages.

Ethanol

The variety of alcohol used in beverages.