Which of the Following Statements About Bonds Is True

question 15

Multiple Choice

Which of the following statements about bonds is true?

• A) Bond prices move in the same direction as market interest rates.
• B) If market interest rates change, long-term bonds will fluctuate more in value than short-term bonds.
• C) Long-term bonds are less risky than short-term bonds.
• D) If market interest rates are higher than a bond's coupon interest rate, then the bond will sell above its par value.
• E) None of the above.

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Definitions:

Instinctive Behaviour

Inborn, automatic responses to specific stimuli that are not learned but rather naturally occur in all members of a species.

Conditioning

The process of learning associations between environmental stimuli and behavioral responses, often distinguished as classical or operant conditioning.

Cognitive Components

The aspects of thinking and understanding, including perception, memory, judgment, and reasoning.

B.F. Skinner

An American psychologist and behaviorist who developed the theory of operant conditioning, emphasizing the consequences of behavior in shaping future actions.