Which One of the Following Statements Is Correct According to Malkiel's

question 13

Multiple Choice

Which one of the following statements is correct according to Malkiel's Theorems?

• A) For a given change in a bond's yield to maturity, the shorter the term to maturity, the greater will be the magnitude of the change in the bond's price.
• B) The price of an outstanding bond is unaffected by changes in market interest rates.
• C) The size of the change in a bond's price increases at a constant rate given even incremental increases in a bond's yield-to-maturity even as the term to maturity lengthens.
• D) For a given change in a bond's yield-to-maturity, the absolute magnitude of the resulting change in the bond's price is directly related to the bond's coupon rate.
• E) For a given absolute change in a bond's yield-to-maturity, a decrease in yield will cause a greater change in the bond's price than will an increase in yield.

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Definitions:

Habits

Basically, routine behaviors that are performed regularly and often automatically.

Social Allergy Effect

A phenomenon where repeated exposure to certain behaviors or habits of others leads to an increasingly negative and irritated reaction over time.

Irritated

Feeling annoyance or discomfort, often due to a specific cause or situation.

Partners' Annoying Habits

Behaviors or actions by a partner in a relationship that are irritating or bothersome to the other person.