Which of the Following Statements Is Correct

question 15

Multiple Choice

Which of the following statements is correct?

• A)If two bonds have the same maturity, the same yield to maturity, and the same level of risk, the bonds should sell for the same price regardless of the bond's coupon rates.
• B)All else being equal, an increase in interest rates will have a greater effect on the prices of short-term than long-term bonds.
• C)All else being equal, an increase in interest rates will have a greater effect on higher-coupon bonds than it will have on lower-coupon bonds.
• D)If a bond's yield to maturity exceeds its coupon rate, the bond's price must be less than its maturity value.

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Definitions:

Misrepresentation

The act of providing false, misleading, or incorrect information, typically with the intention to deceive.

Incidental Damages

Additional expenses incurred by one party due to another's breach of contract, above and beyond the direct damages or loss suffered.

Swimsuits

Clothing designed for people to wear while swimming.

Credit

Credit is the ability to obtain goods or services before payment, based on the trust that payment will be made in the future.