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Which of the following is the most correct? (Assume all bonds to have the same default and liquidity risks) Longer-maturity bonds have more reinvestment rate
Which of the following is the most correct? (Assume all bonds to have the same default and liquidity risks)
Longer-maturity bonds have more reinvestment rate risk.
Zero-coupon bonds are less sensitive to interest rate changes than coupon bonds.
Shorter maturity bond prices are more sensitive to interest rate changes.
A zero-coupon bond always sells at a premium to its par value before its maturity date.
If interest rates are zero, a zero-coupon bond will sell at par.
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