If Interest Rates Fall from 8 Percent to 7 Percent

question 99

Multiple Choice

If interest rates fall from 8 percent to 7 percent, which of the following bonds will have the largest percentage increase in its value?

• A) A 10-year zero coupon bond.
• B) A 10-year bond with a 10 percent semiannual coupon.
• C) A 10-year bond with a 10 percent annual coupon.
• D) A 5-year zero coupon bond.
• E) A 5-year bond with a 12 percent annual coupon.

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Definitions:

Back-channeling

The use of non-verbal cues and short verbal responses to indicate that one is listening and understanding in a communication situation.

Understand

The ability to grasp the meaning, significance, or nature of something.

Symptoms

Observable signs or indications of a condition or disease.

Nonverbal Patient

A patient who is unable to communicate verbally, often requiring special approaches for assessment and communication.