Which of the following statements regarding changes in bond prices relative to changes in market yields is true?
A) Short-term bond prices will increase more than long-term bond prices if market yields increase.
B) Short-term bond prices will increase less than long-term bond prices if market yields decrease.
C) Short-term bond prices will increase more than long-term bond prices if market yields decrease.
D) Short-term bond prices will remain constant and long-term bond prices will increase if market yields decrease.
Correct Answer:
Verified
Q8: A yield to call calculation:
A) is best
Q9: When interest rates decrease:
A) bond prices rise.
B)
Q10: If a bond is callable, this means:
A)
Q11: A deferred call provision means:
A) the bond
Q12: For most bonds the coupon rate is
Q14: Which of the following bonds would you
Q15: Duration was designed to:
A) provide a better
Q16: The duration of a zero-coupon bond:
A) will
Q17: Assuming that interest rates do not change
Q18: The Fisher hypothesis best provides an approximation
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