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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