For a Given Change in Interest Rates, the Longer the Bond's

question 121

Multiple Choice

For a given change in interest rates, the longer the bond's maturity, the ________ the price change.

• A) greater
• B) same
• C) smaller
• D) Greater for a premium bond, smaller for a discount bond.
• E) None of the above.

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Definitions:

Federal Reserve Board Of Governors

The governing body of the Federal Reserve System, overseeing the central banking system of the United States.

Truth-In-Lending Act

A federal law designed to promote the informed use of consumer credit, by requiring disclosures about its terms and cost.

Truth-In-Lending Act

is a federal law designed to protect consumers in their dealings with lenders and creditors by requiring clear disclosure of key terms of the lending arrangement and all costs.

Loan Between Two Consumers

A financial agreement in which one consumer lends money to another consumer without the involvement of traditional financial institutions.