Interest-Rate Risk Would Not Matter to Which of the Following

question 59

Multiple Choice

Interest-rate risk would not matter to which of the following bondholders?

• A) A holder of a U.S. government bond.
• B) A holder of a U.S. government bond indexed for inflation.
• C) A holder of a U.S. government bond who plans on selling it in one year.
• D) A holder of a U.S. government bond that plans on holding it until it matures.

---

Definitions:

High-Quality Goods

High-quality goods are products that meet or exceed customer expectations in terms of performance, durability, and satisfaction, often associated with higher standards of production and materials.

Product Quality

The characteristics and features of a product or service that bears on its ability to satisfy stated or implied needs.

Market Signaling

Process by which sellers send signals to buyers conveying information about product quality.

Asymmetric Information

A situation in which one party in a transaction has more or better information than the other, often leading to an imbalance in power and potentially unfair outcomes.