The Duration of a Coupon Bond

question 1

Multiple Choice

The duration of a coupon bond

• A) does not change after the bond is issued.
• B) can accurately predict the price change of the bond for any interest rate change.
• C) will decrease as the yield to maturity decreases.
• D) all of these are true.
• E) none of these are true.

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Definitions:

Foreign Goods

Products that are produced in a different country than where they are sold or consumed.

Net Capital Outflow

The gap between nationals purchasing assets from abroad and foreigners investing in the nation's assets.

Loanable Funds

A term used in economics to describe the market where savers supply funds for loans to borrowers.

Net Capital Outflow

The imbalance between domestic individuals acquiring assets abroad and foreigners securing assets domestically.