All of the Following Are One of Malkiel's Stated Relationships

question 40

Multiple Choice

All of the following are one of Malkiel's stated relationships between yield changes and bond prices except

• A) Bond prices move inversely to bond yields.
• B) Longer-maturity bonds experience larger price changes than shorter-maturity bonds.
• C) Bond price volatility increases at a diminishing rate as term to maturity increases.
• D) Bond price movements resulting from equal absolute increases or decreases in yield are symmetrical.
• E) Bond price volatility is inversely related to the coupon rate.

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Definitions:

Opportunity Cost

The cost of foregoing the next best alternative when making a decision or choosing to allocate resources in a particular way.

Production Possibility Frontier

A graph that shows all the highest possible production levels for two products, based on available resources and technological capabilities.

Increasing Opportunity Costs

The concept that the cost of forgoing the next best alternative increases as resources become more specialized in production.

Guns And Butter

A term used to describe a country's decision to allocate its resources between defense and civilian goods.