23-61 Which of the Following Observations Is NOT True

question 43

Multiple Choice

23-61 Which of the following observations is NOT true?

• A)Variance of bond prices is nonconstant over time
• B)Variance of bond prices rises at first and then falls as the bond approaches maturity.
• C)As the bond approaches maturity,all price paths must lead to 100 percent of the face value of the bond.
• D)As the bond approaches maturity,all price paths must lead to the principal paid by the issuer on maturity.
• E)Variance of a bond's price or return increases as maturity approaches.

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Definitions:

Standardization

The process of implementing and developing technical standards to ensure consistency, safety, and efficiency across products, services, and procedures.

Coordination

The organization of the different elements of a complex body or activity so as to enable them to work together effectively.

Machine Bureaucracy

A highly structured organizational form that operates through standardized procedures and a clear hierarchy of authority.

Centralization

Centralization refers to the concentration of decision-making authority and control at the top levels of an organizational hierarchy.