The Impact of Interest Rate Changes on Bond Prices Can

question 25

Multiple Choice

The impact of interest rate changes on bond prices can be magnified by:

• A)investing in speculative high-risk high-yield bonds.
• B)investing in higher-quality corporate bonds.
• C)investing in short-term bonds.
• D)More than one of the above

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Definitions:

Total Assets Ratio

Total assets ratio is a financial metric used to assess a company's efficiency in using its assets to generate revenue.

Net Income

The net income a company earns once all expenses and taxes are subtracted from the total revenue.

Operating Cash Flow

Cash generated from a company's normal business operations, indicating whether a company can generate sufficient positive cash flow to maintain and grow its operations.

Indirect Method

A way of preparing the cash flow statement where net income is adjusted for changes in balance sheet account balances to calculate cash flow from operating activities.