Which of the Following Bonds Has the Longest Duration

question 50

Multiple Choice

Which of the following bonds has the longest duration?

• A) An 8-year maturity, 0% coupon bond
• B) An 8-year maturity, 5% coupon bond
• C) A 10-year maturity, 5% coupon bond
• D) A 10-year maturity, 0% coupon bond
• E) Cannot tell from the information given

Recognize the significance of individual choice in the allocation of scarce resources.

Understand the principles of individual choice and how they guide economic reasoning.

Comprehend the concept of opportunity cost as a fundamental principle in economics.

Understand the role of specialization and trade in improving economic outcomes.

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Definitions:

Common Stock

Equity shares that represent ownership in a corporation, giving shareholders voting rights and a share in the company's profits through dividends.

Journalize

The act of recording financial transactions in a company's ledger.

Cash Dividend

A payment made by a company out of its earnings to shareholders, usually in the form of cash.

Stockholders

Individuals or entities that own shares in a corporation, giving them ownership interests and potentially rights to dividends and voting in company matters.