Which of the following statements is true about bond theorems? ( a. For a given change in the interest rate, long-term bonds have higher interest rate risk than short-term bonds. b. Bond prices are positively related to interest rate movements. c. If interest rates are expected to decrease, investors should avoid investing in long-term zero-coupon bonds. d. For a given change in the int ast rate, lower coupon bonds bear lower interest rate risk than higher coupon bonds.
Which of the following statements is true about bond theorems? ( a. For a given change in the interest rate, long-term bonds have higher interest rate risk than short-term bonds. b. Bond prices are positively related to interest rate movements. c. If interest rates are expected to decrease, investors should avoid investing in long-term zero-coupon bonds. d. For a given change in the int ast rate, lower coupon bonds bear lower interest rate risk than higher coupon bonds.
Intermediate Financial Management (MindTap Course List)
13th Edition
ISBN:9781337395083
Author:Eugene F. Brigham, Phillip R. Daves
Publisher:Eugene F. Brigham, Phillip R. Daves
Chapter4: Bond Valuation
Section: Chapter Questions
Problem 2Q: Short-term interest rates are more volatile than long-term interest rates, so short-term bond prices...
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