The Interest-Rate Risk of a Bond Is

question 59

Multiple Choice

The interest-rate risk of a bond is

• A)the risk related to the possibility of bankruptcy of the bond's issuer.
• B)the risk that arises from the uncertainty of the bond's return caused by changes in interest rates.
• C)the unsystematic risk caused by factors unique in the bond.
• D)the risk related to the possibility of bankruptcy of the bond's issuer and the risk that arises from the uncertainty of the bond's return caused by changes in interest rates.
• E)All of the options

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Definitions:

Correcting Entry

An entry made in the accounting records to amend a previously made mistake or incorrect transaction.

Total Assets

The sum of all assets owned by a company, including cash, investments, equipment, and real estate, reflected on the balance sheet.

Adjustments Columns

Columns in an accounting worksheet used for recording adjustments to journal entries at the end of an accounting period before preparing financial statements.

Journalized

The process of recording financial transactions in a company's journal, denoting the first step in the accounting process.