Which of the Following Statements About Bonds Is True

question 120

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 face value.
• E)None of the above.

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Definitions:

Goodness of Fit

A statistical test to see how well sample data fits a distribution from a population with a normal distribution.

Degrees of Freedom

The number of independent values or quantities that can variably assign to a statistical calculation without breaking any constraints.

P-Value

The probability of obtaining test results at least as extreme as the ones observed during the test, assuming the null hypothesis is true.