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When Long-Term Interest Rates Are Very Low, the Future Returns

Question 69

Multiple Choice

When long-term interest rates are very low, the future returns that a pension fund can earn on long-term low-risk bonds are __________ if the bonds are held to maturity; if the bonds are not held to maturity, there is ____________ potential for their prices to increase.


A) low; significant
B) low; not much
C) high; significant
D) high; not much

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