Two Bonds Are Selling at Par Value and Each Has

question 39

Multiple Choice

Two bonds are selling at par value and each has 17 years to maturity.The first bond has a coupon rate of 6% and the second bond has a coupon rate of 13%.Which of the following is false about the durations of these bonds?

• A)The duration of the higher-coupon bond will be higher.
• B)The duration of the lower-coupon bond will be higher.
• C)The duration of the higher-coupon bond will equal the duration of the lower-coupon bond.
• D)There is no consistent statement that can be made about the durations of the bonds.
• E)A,C,and D

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Describe the process and challenges of achieving sexual identity in adolescence.

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Definitions:

Contract

A legally binding agreement between two or more parties that outlines obligations and rights of those involved.

Compounded Annually

Interest that is calculated once a year and added to the principal, which then earns interest the following year.

Investment

The act of allocating resources, usually money, in the expectation of generating an income or profit.

Compounded Annually

Interest on an investment or loan calculated once a year, where the interest is added to the principal.