Which of the Following Statements Is CORRECT

question 91

Multiple Choice

Which of the following statements is CORRECT?

• A) all else equal, an increase in interest rates will have a greater effect on the prices of short-term than long-term bonds.
• B) all else equal, an increase in interest rates will have a greater effect on higher-coupon bonds than it will have on lower-coupon bonds.
• C) if a bond's yield to maturity exceeds its coupon rate, the bond's price must be less than its maturity value.
• D) if a bond's yield to maturity exceeds its coupon rate, the bond's current yield must be less than its coupon rate.
• E) if two bonds have the same maturity, the same yield to maturity, and the same level of risk, the bonds should sell for the same price regardless of the bond's coupon rates.

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Definitions:

Pharynx

The muscular tube at the back of the nose and mouth that connects them to the esophagus.

Serous Fluid

A clear, watery fluid that lubricates the surfaces of membranes lining body cavities and organs.

Pleura

Thin layers of tissue that line the lungs and the inside of the chest cavity, providing lubrication necessary for the lungs to move smoothly during breathing.

Thorax

The chest cavity.