Question
Which of the following statements is CORRECT? A. All else equal, an increase in interest rates will have a greater effect on the prices of
Which of the following statements is CORRECT?
A. | All else equal, an increase in interest rates will have a greater effect on the prices of short-term than long-term bonds. | |
B. | If two bonds have the same maturity, the same yield to maturity, and the same level of risk, the bonds should sell for the same price regardless of their coupon rates. | |
C. | All else equal, an increase in interest rates will have a greater effect on higher-coupon bonds than it will have on lower-coupon bonds. | |
D. | If a bonds yield to maturity exceeds its coupon rate, the bonds price must be less than its maturity value. |
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