Which of the Following Is False

question 23

Multiple Choice

Which of the following is false?

• A) As interest rates rise, bond prices rise, everything else the same.
• B) Given an absolute change in interest rates, the percentage increase in a bond's price will be greater than the percentage decrease, everything else the same.
• C) Long-term bonds change proportionately more in price than short-term bonds for a given rate change, everything else the same.
• D) A bond with a lower coupon will change more in price than a bond with a higher coupon, everything else the same.
• E) A bond's duration is a measure of its price elasticity.

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Definitions:

Autarky

A situation where a country or economy is self-sufficient and does not engage in international trade or relies on imports.

Comparative Advantage

An economic principle that states a country or individual can produce a good or service at a lower opportunity cost than others.

Consumption Point

A specific point on a consumer’s budget constraint that shows the combination of different goods or services they will consume to maximize utility.

Wheat

A cereal grain considered a staple food in many parts of the world, used to make products like bread, pasta, and cereal, among others.