Which of the Following Statements About Bonds Is True

question 100

Multiple Choice

Which of the following statements about bonds is true?

• A)The market value of a bond moves in the opposite direction of market interest rates.
• B)As the maturity date of a bond approaches, the market value of a bond will become more volatile.
• 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.

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Definitions:

Research Results

The findings and conclusions derived from systematic investigation into a specific subject area or question, aiming to add to existing knowledge.

Second-Level Outcome

An effect or result that is one step removed from the immediate outcome, often referring to the longer-term or indirect effects.

Valence

The intrinsic attractiveness or aversiveness of an event, object, or situation, often influencing people's choices and behaviors.

Expectancy Model

A psychological theory stating that an individual's motivation is related to their expectation of achieving a desired performance level and the value of the associated reward.