As a Bond's Time to Maturity Increases, the Bond's Sensitivity

question 36

Multiple Choice

As a bond's time to maturity increases, the bond's sensitivity to interest rate risk:

• A) increases at an increasing rate.
• B) increases at a decreasing rate.
• C) increases at a constant rate.
• D) decreases at an increasing rate.
• E) decreases at a decreasing rate.

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Definitions:

New Memories

The formation of fresh neural connections to store information recently acquired or experienced.

Motor Cortex

A region in the cerebral cortex, located just behind the frontal lobes, that processes information about voluntary movement.

Cerebral Cortex

The outer layer of the brain involved in various higher brain functions such as sensation, voluntary muscle movement, thought, reasoning, and memory.

Voluntary Muscle Movement

Muscle movements that are under conscious control, involving skeletal muscles and used in performing deliberate actions.