If the Interest Rates Rise, Which of the Following Will

question 22

Multiple Choice

If the interest rates rise, which of the following will be true?

• A) The 15-year bond price will decline more than the 30-year bond price
• B) The price of the 10-year bond will rise while the price of the 15-year bond will decline
• C) The prices of different bonds will move in a different way
• D) None of the above

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Definitions:

Equity Method

A method of accounting where an investor records its investment in an associate company at original cost and subsequently adjusts the carrying amount for its share of the profit or loss and other comprehensive income of the associate.

Consolidation

The process of merging the financial statements of two or more entities into one, typically within a group comprising a parent company and its subsidiaries.

Equity Method

An accounting technique used to record investments in other companies where the investor has significant influence but does not have majority control.

Statement of Comprehensive Income

A financial statement that shows all changes in equity during a period except those resulting from investments by and distributions to equity investors.