If Zero Rates (I

question 4

Multiple Choice

If zero rates (i.e., discount rates) are the same for all maturities and remain the same over the next year, the price of a zero-coupon bond that matures ten years from today will:

• A) Decrease over the next year
• B) Remain the same over the next year
• C) Increase over the next year
• D) Cannot tell with the given information

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Definitions:

Range

The difference between the highest and lowest values in a data set, indicating its spread.

Coefficient of Variation

A metric that quantifies the spread of data points around the mean within a dataset, represented as a percentage of the mean itself.

Variance

A statistical measure of the dispersion of a set of data points in a data distribution, showing how each data point differs from the mean.

Variance

A measurement of the spread between numbers in a data set, indicating how much the numbers differ from the mean.