Which of the Following Statements About Bonds Is True

question 87

Multiple Choice

Which of the following statements about bonds is true?

• A) If market interest rates are below a bond's coupon interest rate, then the bond will sell above its par value.
• B) Long-term bonds have less interest rate risk than do short-term bonds.
• C) Bond prices move in the same direction as market interest rates.
• D) As the maturity date of a bond approaches, the market value of a bond will become more volatile.

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Definitions:

Inferior Vena Cava

The large vein that carries deoxygenated blood from the lower and middle parts of the body into the right atrium of the heart.

Right Ventricle

The chamber of the heart responsible for pumping deoxygenated blood to the lungs via the pulmonary artery.

Mitral Valve

A valve in the heart located between the left atrium and left ventricle that allows blood to flow one way: from the atrium into the ventricle.

Aortic Semilunar Valve

A valve in the heart located between the left ventricle and the aorta, preventing backflow of blood into the left ventricle.