Which of the Following Is True of Interest-Rate Risk

question 76

Multiple Choice

Which of the following is true of interest-rate risk?

• A) It is the risk that the coupon rate for a bond will change, affecting current bondholders' coupon payments.
• B) It refers to the probability that a borrower will default on debt obligations.
• C) It is the risk that the face value of a bond will change before maturity.
• D) Individuals owning long-term bonds are exposed to greater interest-rate risk.

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Definitions:

Idiographic

An approach focusing on the individual and understanding the unique aspects of that particular individual.

Quantitative Research

A research method focusing on obtaining data through measurable and typically numeric methods to understand patterns, relationships, or causal effects.

Methodology

A system of methods used in a particular area of study or activity, particularly in research.

Context

The circumstances or setting in which a research study is conducted, including cultural, environmental, and temporal factors that may affect outcomes.