Which of the Following Is NOT True Regarding Bond Maturities

question 22

Multiple Choice

Which of the following is NOT true regarding bond maturities?

• A)Short maturities sacrifice price appreciation opportunities.
• B)Longer maturities have greater price fluctuations.
• C)Short maturities serve to protect the investor when rates are rising.
• D)Long term interest rates are more volatile than short term interest rates.

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Definitions:

External Equity

Financing obtained from sources outside a company, such as public stock offerings or venture capital investments.

Flotation Cost

Flotation cost is the total charges associated with creating and issuing new shares of stock, encompassing underwriting, legal, and registration fees.

Equity Capital

Funds raised by a company in exchange for shares of ownership, representing the value of shareholders' equity.

Retaining Earnings

Profits that a company has decided to keep or reinvest in itself rather than pay out as dividends to its shareholders.