Which one of the following is correct concerning bond prices?
A) All else equal, a 12% bond will sell at a higher price than a 10% bond.
B) The price of a short-term bond is more sensitive to interest rate changes than the price of a Long-term bond.
C) The price of a zero-coupon bond is less sensitive to interest rate changes than the price of a coupon bond.
D) Bond prices tend to fluctuate more the less time to maturity.
E) Movements in bond prices are directly related to movements in the market rate of interest.
Correct Answer:
Verified
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