Which of the Following Statements Is CORRECT

question 47

Multiple Choice

Which of the following statements is CORRECT?

• A) Long-term bonds have less interest rate price risk but more reinvestment rate risk than short-term bonds.
• B) If interest rates increase, all bond prices will increase, but the increase will be greater for bonds that have less interest rate risk.
• C) Relative to a coupon-bearing bond with the same maturity, a zero coupon bond has more interest rate price risk but less reinvestment rate risk.
• D) Long-term bonds have less interest rate price risk and also less reinvestment rate risk than short-term bonds.
• E) One advantage of a zero coupon Treasury bond is that no one who owns the bond has to pay any taxes on it until it matures or is sold.

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Definitions:

Values

In computing, refers to the actual data representation assigned to variables, database fields, or parameters in software development and database management.

Pie Chart

A circular statistical graphic divided into slices to illustrate numerical proportion.

Slices

Discrete segments or portions of a data set, image, or graphic used for detailed analysis or as part of a larger composition.

Whole

A term typically used to describe something that is complete or entire, not missing any parts.