Which of the Following Bond Pricing Rules Is Incorrect

question 41

Multiple Choice

Which of the following bond pricing rules is incorrect?

• A)Bond prices and interest rates are inversely related
• B)Prices of long-term bonds are less sensitive to changes in interest rates than short-term bonds
• C)Bond price sensitivity increases at a decreasing rate as maturity increases
• D)Bond prices are more sensitive to a decline in market yield to maturity

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