Which of the Following Statements Is Most Correct

question 49

Multiple Choice

Which of the following statements is most correct?

• A) All else equal,an increase in interest rates will have a greater effect on the prices of long-term bonds than it will on the prices of short-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) An increase in interest rates will have a greater effect on a zero-coupon bond with 10 years maturity than it will have on a 9-year bond with a 10 percent annual coupon.
• D) All of the above are correct.
• E) Answers a and c are both correct.

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Definitions:

Currencies

Systems of money in common use, particularly in a nation or economic region, serving as a medium of exchange.

Governments

Governments refer to the group or system of individuals governing an organized community, often a state.

Own Currencies

Refers to the sovereign currency that is issued and controlled by a country's own government or central bank.

Exchange Rates

The rate at which one currency can be converted into another, indicating the quantity of one currency that can be exchanged for an alternative currency.