Which of the Following Bonds Would Be Likely to Exhibit

question 108

Multiple Choice

Which of the following bonds would be likely to exhibit a greater degree of interest rate risk?

• A) A zero-coupon bond with 20 years until maturity
• B) A coupon-paying bond with 20 years until maturity
• C) A floating-rate bond with 20 years until maturity
• D) A zero-coupon bond with 30 years until maturity

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Definitions:

Order of Operations

A set of rules that determines the sequence in which mathematical operations should be performed to accurately solve expressions.

Vitruvian Man

A drawing by Leonardo da Vinci illustrating the ideal human body proportions based on the writings of the ancient Roman architect Vitruvius.

Method-Of-Place Technique

Also known as the loci method, a mnemonic strategy using visualization of familiar spatial environments to recall information.

Stacking Technique

A productivity method where tasks are grouped and tackled in sequence or simultaneously to maximize efficiency.