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

question 35

Multiple Choice

A company has two outstanding bonds with the same features,apart from their coupon.Bond A has a coupon of 5%,while bond B has a coupon of 8%.If the market interest rate changes by 10%:

• 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:

Instinctive Behavior System

Innate, fixed patterns of behavior in animals that are typically automatic in response to specific stimuli.

Specific Function

Branches from the mathematical definition to specify a distinct purpose or role that a particular process, action, or object serves within a broader system.

Imprinting

A rapid learning process that occurs in some animals early in life, whereby they establish a behavior pattern or social attachment.

Social Attachment Process

The formation of a strong emotional bond between individuals, crucial for personal development and social integration.