How Does the Size of the Change in a Bond's

question 36

Multiple Choice

How does the size of the change in a bond's price react in response to a given change in the yield to maturity as the time to maturity increases?

• A)decreases at an increasing rate
• B)decreases at a diminishing rate
• C)increases at a constant rate
• D)increases at a diminishing rate
• E)increases at an increasing rate

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Definitions:

Cochlea

A coiled, bony, fluid-filled tube in the inner ear that houses the sensory receptors.

Auditory Nerve

The nerve that transmits auditory information from the cochlea in the inner ear to the brain.

Higher-Frequency Sounds

Sounds that have a higher pitch due to their faster vibration rates, typically above the normal human hearing range of 20 to 20,000 hertz.

Cochlea

A spiral-shaped, fluid-filled inner ear structure that is responsible for converting sound waves into nerve impulses.