Everything Else Equal, the ________ the Maturity of a Bond

question 49

Multiple Choice

Everything else equal, the ________ the maturity of a bond and the ________ the coupon, the greater the sensitivity of the bond's price to interest rate changes.

• A) longer; higher
• B) longer; lower
• C) shorter; higher
• D) shorter; lower

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Definitions:

Expected Frequencies

Predicted counts in each category of a contingency table assuming no association between variables.

Chi-Square Test

A statistical test used to determine the likelihood of an observed distribution occurring by chance.

Retirement Age

The age at which a person is expected or required to stop working and is eligible to receive retirement benefits like Social Security or pensions.

Age Distribution

The proportionate numbers of individuals in successive age categories in a given population.