Which of the Following Bonds Will Have the Largest Percentage

question 9

Multiple Choice

Which of the following bonds will have the largest percentage increase in value if interest rates decrease by 1%?

• A) 2-year, 5% coupon bond
• B) 30-year, 10% coupon bond
• C) 10-year, zero coupon
• D) 30-year, zero coupon

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Definitions:

Stranger Anxiety

A form of distress that children experience when exposed to people unfamiliar to them, typically appearing around 6 months of age and peaking in infancy.

Brain Plasticity

The brain's ability to change and adapt as a result of experience by reorganizing its structure, functions, or connections.

Identity

The sense of self, encompassing personal, social, and cultural identities and how these are expressed and perceived.

Intimacy

In Erikson’s theory, the ability to form close, loving relationships; a primary developmental task in young adulthood.