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

question 2

Multiple Choice

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

• A) term to maturity is lower.
• B) coupon rate is higher.
• C) yield to maturity is lower.
• D) term to maturity is lower and coupon rate is higher.
• E) All of the options are correct.

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Definitions:

Social Security Administration

A U.S. government agency that administers social programs covering disability, retirement, and survivors' benefits, among others.

W-2

A W-2 form is a tax document issued by employers in the United States to employees, indicating the amount of wages paid and taxes withheld during the year.

W-3

A tax form used in the United States to summarize the total wages paid and taxes withheld for employees to the Social Security Administration.

Federal Unemployment Tax Return

A tax return specifically for reporting the amount of federal unemployment tax a business is responsible for paying, related to the wages paid to employees.