8-24 for a Given Change in Interest Rates,fixed-Rate Assets with Long-Term

question 41

True/False

8-24 For a given change in interest rates,fixed-rate assets with long-term maturities will have greater changes in price than assets with shorter maturities.

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Definitions:

U.S.GAAP

United States Generally Accepted Accounting Principles, a standard framework of accounting rules for financial reporting.

Long-lived Asset

An asset with a useful life longer than one year, typically including property, plant, and equipment, used in the operation of a company.

GAAP

The standard set of guidelines for financial accounting known as Generally Accepted Accounting Principles, used primarily within the United States and other jurisdictions.

Replacement Cost

The cost to replace an asset of a company at the present time, according to its current worth.