A Pricing Theorem for the Bond Market States That the Percentage

question 5

Multiple Choice

A pricing theorem for the bond market states that the percentage change in a bond's price owing to a change in its yield will be ____ if its coupon rate is higher.

• A) higher
• B) smaller
• C) the same
• D) zero

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Definitions:

Modeling

A behavior modification technique that involves observing the behavior of others (the models) and participating with them in performing the desired behavior.

Vicariously

Experiencing something indirectly or through another person's experience, often used in the context of learning or emotional experiences.

Reinforcement

A process in learning theory where behaviors are encouraged or discouraged through rewards or punishments.

Academic Pursuit

The active engagement in educational activities with the aim of gaining knowledge, skills, and qualifications.