If You Expected Interest Rates to Fall, You Would Prefer

question 24

Multiple Choice

If you expected interest rates to fall, you would prefer to own bonds with

• A) short maturities and low coupons.
• B) long maturities and high coupons.
• C) long maturities and low coupons.
• D) short maturities and high coupons.
• E) None of these are correct.

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Definitions:

Retail Inventory Method

An accounting technique used to estimate inventory value by comparing the cost of goods sold to the total sales.