Which of the following is False? The duration of a 20-year 5% coupon bond is larger than that of a 20-year 10% coupon bond. A 20-year zero coupon bond has the duration of 20 years. The higher the duration, the more the bond's price (or the fixed income security's price) would fall if there is a rise in interest rates. One way to manage both price and reinvestment risk is to buy a zero coupon Treasury bond with a duration longer than the investor's investment horizon. Which of the following is Correct? All else equal, secured debt is more risky than unsecured debt. All else equal, bonds with higher coupons have less price risk than bonds with smaller coupons. Default risk premiums are generally lower on corporate bonds than on Treasury bonds. If two bonds have the same maturity and the same yield to maturity, the bonds should sell for the same price regardless of their coupon rates. Which of the following is False? The longer the maturity, the greater the change in value of a bond for a given change in interest rates, rd. Price risk relates to the income the portfolio produces while reinvestment risk relates to the current value of the bond portfolio. An investor's investment horizon determines which type of risk, price risk or reinvestment risk, is more relevant. Duration is the weighted average of the time it takes to receive each of the bond's cash flows