Which of the Following Statements Is Correct

question 15

Multiple Choice

Which of the following statements is correct?

• A)If two bonds have the same maturity, the same yield to maturity, and the same level of risk, the bonds should sell for the same price regardless of the bond's coupon rates.
• B)All else being equal, an increase in interest rates will have a greater effect on the prices of short-term than long-term bonds.
• C)All else being equal, an increase in interest rates will have a greater effect on higher-coupon bonds than it will have on lower-coupon bonds.
• D)If a bond's yield to maturity exceeds its coupon rate, the bond's price must be less than its maturity value.

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Definitions:

Piggybacking

Utilizing or leveraging the work, success, or momentum of another for one's own benefit, often without authorization.

Sequencing

The process of arranging activities, tasks, or events in a specific order or sequence.

Absentee Brainstorming

A technique where individuals generate ideas separately before sharing them with the group, often used to prevent the domination of discussions by vocal participants.

Silent Brainstorming

A collaborative idea generation method where participants write down their ideas individually without discussing them, to encourage independent thinking and prevent dominant voices from swaying the group.