Which of the Following Are Generally True of All Bonds

question 73

Multiple Choice

Which of the following are generally true of all bonds?

• A) The longer a bond's maturity, the lower is the rate of return that occurs as a result of the increase in the interest rate.
• B) Even though a bond has a substantial initial interest rate, its return can turn out to be negative if interest rates rise.
• C) Prices and returns for long-term bonds are more volatile than those for shorter-term bonds.
• D) All of the above are true.
• E) Only A and B of the above are true.

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Definitions:

Corporate Insider

A person within an organization, typically an executive or employee, who has access to confidential or non-public information.

Short-swing Profits

Profits earned by corporate insiders from buying and selling their company's stock within a short timeframe, subject to specific legal regulations and reporting requirements.

Security

A financial instrument representing an ownership position in a publicly-traded corporation (stock), a creditor relationship with a governmental body or a corporation (bond), or rights to ownership as represented by an option.

Securities Exchange Act

A U.S. law enacted in 1934 to govern the trading of securities, such as stocks and bonds, aimed at protecting investors from fraud.