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Assuming That Other Things Remain the Same, What Will Happen

Question 17

Multiple Choice

Assuming that other things remain the same, what will happen to the interest on a bond as the bond's maturity increases?


A) As maturity increases, the bond will have less interest because it has less risk.
B) As maturity increases, the bond will have less interest because it has more risk.
C) As maturity increases, the bond will have more interest because it has more risk.
D) There is no relation between term to maturity and risk.

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