ABC Company Has Two Bonds Outstanding That Are the Same

question 142

Multiple Choice

ABC company has two bonds outstanding that are the same except for the maturity date. Bond D matures in 4 years, while Bond E matures in 7 years. If the required return changes by 5 percent, then ________.

• A) bond D will have a greater change in price
• B) bond E will have a greater change in price
• C) the price of the bonds will be constant
• D) the percentage price change for the bonds will be equal

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Definitions:

Epigenetics

The study of changes in organisms caused by modification of gene expression rather than alteration of the genetic code itself.

Neurogenesis

The process of generating new neurons in the brain, which continues to occur in certain regions throughout life.

Neural Pruning

The process of eliminating unused neurons and synaptic connections in the brain to enhance the efficiency of neuronal transmissions.

Plasticity

The brain's ability to change and adapt as a result of experience or injury.