As the Length of Time to Maturity (I

question 5

Multiple Choice

As the length of time to maturity (i.e., the term) of a bond increases, generally

• A)the coupon rate rises
• B)the coupon rate falls
• C)the riskiness of the bond falls
• D)the price of the bond rises

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Definitions:

Rate of GDP Growth

The annual percentage increase in a country's gross domestic product, indicating the pace at which its economy is expanding or contracting.

Unsystematic Risk

The risk associated with a specific issuer of a security, such as a company's financial condition or management decisions, distinct from market risk.

Unemployment Figures

Unemployment figures represent the statistic that measures the number of people who are actively looking for employment but unable to find work, often expressed as a percentage of the labor force.

Unsystematic Risk

The risk associated with a specific company or industry, also known as non-systematic risk or diversifiable risk.