Which of the Following Statements Is CORRECT

question 92

Multiple Choice

Which of the following statements is CORRECT?

• A) All else equal, an increase in interest rates will have a greater effect on the prices of short-term than long-term bonds.
• B) All else equal, an increase in interest rates will have a greater effect on higher-coupon bonds than it will have on lower-coupon bonds.
• C) If a bond's yield to maturity exceeds its coupon rate, the bond's price must be less than its maturity value.
• D) If a bond's yield to maturity exceeds its coupon rate, the bond's current yield must be less than its coupon rate.
• E) If two bonds have the same maturity, the same yield to maturity, and the same level of risk, the bonds should sell for the same price regardless of the bond's coupon rates.

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Definitions:

Authoritarianism

A governing system characterized by strong central power and limited political freedoms, often with enforced obedience to authority.

Reciprocity Norm

A social expectation that people will respond to each other in kind, repaying positive actions with positive actions and fostering mutual aid and cooperation.

Rule of Law

The idea that all individuals and organizations are accountable under laws that are impartially applied and enforced.

Belief in a Just World

The psychological concept that people get what they deserve and deserve what they get, which can affect attitudes toward victims and perpetrators in society.