The ABC Company Has Two Bonds Outstanding That Are the Same

question 131

Multiple Choice

The 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 15 percent

• 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 price change for the bonds will be equal.

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Definitions:

Cranial Nerves

Twelve pairs of nerves that emerge directly from the brain, rather than the spinal cord, and supply motor and sensory functions to the head and neck.

Ganglia

Structures containing a collection of nerve cell bodies, typically located outside the brain and spinal cord.

Peripheral Nervous System

The part of the nervous system that consists of the nerves and ganglia outside of the brain and spinal cord, connecting the CNS to limbs and organs.

Peripheral Nervous System

The section of the nervous system lying outside the brain and spinal cord, which contains all the nerves that connect the CNS to the rest of the body.