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Interest Rate Risk. How is interest rate risk affected by a bond's maturity? How can investors use expectations of interest rate movements to their advantage?
Interest Rate Risk. How is interest rate risk affected by a bond's maturity? How can investors use expectations of interest rate movements to their advantage? If interest rates were to rise, the price of a: (Select the best answer below.) O A. 20-year bond and a 1-year bond would fall relatively the same. O B. 20-year bond would fall to a greater extent than the price of a 1-year bond. OC. 20-year bond and a 1-year bond would rise relatively the same. OD. 1-year bond would fall to a greater extent than the price of a 20-year bond. an investor expects interest rates will decline over time, he should invest in: (Select the best answer below.) O A. longer-term maturity bonds. O B. stocks. C. shorter-term maturity bonds. OD. some long-term and some short-term maturity bonds
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