The Prices of Bonds with ____ Are Most Sensitive to Interest

question 70

Multiple Choice

The prices of bonds with ____ are most sensitive to interest rate movements.

• A)high coupon payments
• B)zero coupon payments
• C)small coupon payments
• D)none of the above (The size of the coupon payment does not affect sensitivity of bond prices to interest rate movements.)

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Definitions:

Uncertain Hours

Work hours that are not fixed or predictable, often varying from week to week.

Commission Based

Pertains to a compensation method where individuals or entities earn a percentage of the sales they generate or deals they close.

Certainty

A situation or condition where there is no doubt or variability in the outcome or result.

Labor Market

A marketplace where workers find paying work, employers find willing workers, and wage rates are determined.