Which of the Following Statements Is Correct

question 97

Multiple Choice

Which of the following statements is correct?

• A) A 10-year bond would have more interest rate price risk than a 5-year bond,but all 10-year bonds have the same interest rate price risk.
• B) A 10-year bond would have more reinvestment rate risk than a 5-year bond,but all 10-year bonds have the same reinvestment rate risk.
• C) If their maturities were the same,a 5 percent coupon bond would have more interest rate price risk than a 10 percent coupon bond.
• D) If their maturities were the same,a 5 percent coupon bond would have less interest rate price risk than a 10 percent coupon bond.
• E) Zero-coupon bonds have more interest rate price risk than any other type bond,even perpetuities.

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Definitions:

Eyebrows

The strips of hair growing above the eyes, playing a role in facial expression, communication, and protection of the eyes from sweat and debris.

Buccinators

The buccinator muscles are thin, flat muscles of the cheeks, involved in blowing, sucking actions, and aiding in mastication by pressing the cheeks against the teeth.

Platysma

A thin, superficial muscle located in the neck, responsible for lowering the jaw and drawing the lower lip and corners of the mouth down.

Temporoparietalis

A muscle located in the region of the temporal and parietal bones, involved in moving the scalp and ear.