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The Relationship That Exists Between Bond Maturity and Risk Can

Question 9

Multiple Choice

The relationship that exists between bond maturity and risk can be explained through observing that:


A) The longer the period,the greater the potential for a change in the ability of a company to repay its debt
B) A broad-based change in interest rates will have a greater effect on long-term bonds
C) The shorter the period,the greater the potential for a change in the ability of a company to repay its debt
D) Both a and b
E) Both b and c

Correct Answer:

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