Bonds with Longer Terms to Maturity Are

question 121

Multiple Choice

Bonds with longer terms to maturity are

• A)very sensitive to rates moving up only.
• B)less sensitive to interest rate changes up or down.
• C)very sensitive to interest rate changes up or down.
• D)very sensitive to rates moving down only.

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Definitions:

Type I Error

The mistake of rejecting a true null hypothesis in hypothesis testing, also known as a "false positive."

Type II Error

A statistical error that occurs when a false null hypothesis is not rejected, indicating a false negative finding in testing.

Null Hypothesis

A statement in statistics that proposes there is no significant difference or effect, often tested against an alternative hypothesis.

Alternative Hypothesis

A statement that contradicts the null hypothesis, suggesting that there is a significant difference or effect in a population parameter.