Which of the Following Statements Is CORRECT

question 1

Multiple Choice

Which of the following statements is CORRECT?

• A) the time to maturity does not affect the change in the value of a bond in response to a given change in interest rates.
• B) you hold two bonds. one is a 10-year, zero coupon, bond and the other is a 10-year bond that pays a 6% annual coupon. the same market rate, 6%, applies to both bonds. if the market rate rises from the current level, the zero coupon bond will experience the smaller percentage decline.
• C) the shorter the time to maturity, the greater the change in the value of a bond in response to a given change in interest rates.
• D) the longer the time to maturity, the smaller the change in the value of a bond in response to a given change in interest rates.
• E) you hold two bonds. one is a 10-year, zero coupon, issue and the other is a 10-year bond that pays a 6% annual coupon. the same market rate, 6%, applies to both bonds. if the market rate rises from the current level, the zero coupon bond will experience the larger percentage decline.

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Definitions:

Attitudes

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Change Agents

Individuals or entities that act as catalysts for change within an organization, promoting and facilitating innovation and improvement.

Transformational Change

A fundamental, radical reorganization and rethinking of business operations to achieve significant improvements in performance.

Organizational Change

The process through which a company or institution changes its structure, strategies, operational methods, or culture to effect change within the organization and respond to internal and external pressures.