Which of the Following Statements Is Most Correct

question 46

Multiple Choice

Which of the following statements is most correct?

• A)All else equal, an increase in interest rates will have a greater effect on the prices of long-term bonds than it will on the prices of short-term bonds.
• B)All else equal, and increase in interest rate will have a greater effect on higher-coupon bonds than it will have on lower-coupon bonds.
• C)An increase in interest rates will have a greater effect on a zero-coupon bond with 10 years maturity than it will have on a 9-year bond with a 10 percent annual coupon.
• D)All of the above are correct.
• E)Answers a and c are both correct.

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