Which of the Following Statements Is True

question 22

Multiple Choice

Which of the following statements is true?

• A) For a given change in market interest rates, the prices of higher-coupon bonds change more than the prices of lower-coupon bonds.
• B) If market interest rates rise, a 1-year bond will fall in value more than a 10-year bond.
• C) If market interest rates rise, bond prices will rise.
• D) If market interest rates rise, a 10-year bond will fall in value more than a 1-year bond.

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Definitions:

Reasonably Foreseeable

A legal standard referring to events or consequences that a person should anticipate as likely to happen under certain circumstances.

Generally Accepted Auditing Standards

Principles that provide a framework for auditors to conduct financial audits, ensuring accuracy, consistency, and verifiability.

Negligence

A failure to exercise the care that a reasonably prudent person would exercise in similar circumstances, leading to harm or damage.

Actual Fraud

Refers to intentional deception made for personal gain or to damage another individual.