Holding Other Factors Constant,the Interest-Rate Risk of a Coupon Bond

question 10

Multiple Choice

Holding other factors constant,the interest-rate risk of a coupon bond is higher when the bond's:

• A)term-to-maturity is higher.
• B)coupon rate is higher.
• C)yield to maturity is higher.
• D)all of the above.
• E)none of the above.

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Definitions:

Fixed Amount

A fixed amount refers to a specific quantity or sum of money that does not change over time, often used in financial contexts like investments, payments, or fees.

Specified Event

An occurrence or situation outlined within a contract that triggers certain actions or conditions, often used in insurance and derivatives contracts.

Striking Price

The set price at which an option's holder is allowed to purchase or sell the asset underlying the option.

Stock Put Option

A financial derivative that gives the holder the right, but not the obligation, to sell a specified quantity of a stock at a set price within a certain time period.