A Company Has Two Outstanding Bonds with the Same Features,apart

question 64

Multiple Choice

A company has two outstanding bonds with the same features,apart from the maturity date.Bond A matures in five years,while bond B matures in 10 years.If the market interest rate changes by 5%:

• A) bond A will have the greater change in price.
• B) bond B will have the greater change in price.
• C) the price of the bonds will not alter.
• D) the price of the bonds will change by the same amount.

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Definitions:

Daily Operating Time

The total time per day during which a business or system is operational and open for business.

Cycle Time

The total time from the beginning to the end of a process, indicating the time taken to complete a single cycle of an operation.

Operating Time

The total time during which a machine, system, or facility is functioning and available for use.

Fabrication Lines

Assembly lines specifically designed for the manufacturing and assembling of products from raw materials or components.