Which of the Following Government of Canada Bonds (With All

question 38

Multiple Choice

Which of the following government of Canada bonds (with all other features the same) would have the most interest rate risk?

• A)A 3% coupon bond maturing in ten years
• B)A 6% coupon bond maturing in ten years
• C)A 3% coupon bond maturing in five years
• D)A 6% coupon bond maturing in five years

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Definitions:

Fixed Costs

Expenses like rent, salaries, and insurance that stay the same no matter the production or sales volume.

Operating Cash Flow

Cash generated from a company's normal business operations, indicating whether a company can maintain and grow its operations.

Cash Break-even Point

The point at which a business generates enough revenue to cover its operating cash expenses, resulting in zero net cash flow.

Variable Cost

Variable cost is a cost that changes in proportion to the level of activity or production volume.