Which of the Following Statements About Bonds Is True

question 53

Multiple Choice

Which of the following statements about bonds is true?

• A) Bond interest rates fall with increased default risk.
• B) Bond interest rates and default risk are not related.
• C) Bond prices rise with increased default risk.
• D) Bond prices rise with increased interest rates.
• E) Bond interest rates rise with increased default risk.

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Definitions:

Independent Variables

Variables that are manipulated or categorized to determine their effect on dependent variables in an experiment or study.

Data Points

Individual pieces of factual information collected from measurements or observations, used for analysis or calculation in a study or survey.

Significance Level

A statistical measure that determines the threshold at which the null hypothesis of a test is rejected.

Critical Value

A point on the scale of the test statistic beyond which we reject the null hypothesis, and it depends on the chosen significance level.