When Bonds Sell Above Par, What Is the Relationship of Price

question 63

Multiple Choice

When bonds sell above par, what is the relationship of price sensitivity to rising interest rates?

• A) Price volatility increases at an increasing rate.
• B) Price volatility increases at a decreasing rate.
• C) Price volatility decreases at a decreasing rate.
• D) Price volatility decreases at an increasing rate.

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Definitions:

Exploiter

An individual or entity that takes unfair advantage of others, often in a business or economic context, to gain benefits at their expense.

MRP of Land

Marginal Revenue Product of Land denotes the additional revenue generated from the utilization of an additional unit of land, underpinning its value in production.

Supply of Land

The total quantity of available land or real estate, which is inherently fixed but can vary in usability and value due to location, zoning, and development.

Marginal Land

Land that produces little yield or economic value due to poor quality, location, or other factors, making it the least productive for agricultural use.