Which of the Following Are False About the Interest-Rate Sensitivity

question 1

Multiple Choice

Which of the following are false about the interest-rate sensitivity of bonds? I) Bond prices and yields are inversely related.II) Prices of long-term bonds tend to be more sensitive to interest-rate changes than prices of short-term bonds.III) Interest-rate risk is correlated with the bond's coupon rate.IV) The sensitivity of a bond's price to a change in its yield to maturity is inversely related to the yield to maturity at which the bond is currently selling.

• A) I
• B) III
• C) I, II, and IV
• D) II, III, and IV
• E) I, II, III, and IV

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