An Increase in a Bond's Yield to Maturity Results in a Price

question 1

Multiple Choice

An increase in a bond's yield to maturity results in a price decline that is ________ the price increase resulting from a decrease in yield of equal magnitude.

• A) greater than
• B) equivalent to
• C) smaller than
• D) The answer is indeterminate

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Definitions:

Variable Overhead

Indirect operating costs that vary with the level of production activity, such as utilities and materials.

Direct Labor

The wages or salaries paid to employees who are directly involved in producing goods or services.

Direct Materials

The raw materials that can be directly traced to the manufacturing of a product and are considered a variable cost.