Question
Which of the following statements is correct? If two Australian government bonds were issued with a different coupon rate but the same maturity date, _________________.
Which of the following statements is correct?
If two Australian government bonds were issued with a different coupon rate but the same maturity date, _________________.
A. | investors may choose the one with the lowest coupon rate if the capital gain is higher. | |
B. | investors would choose the one with the highest coupon rate. | |
C. | investors would be confused and stay away from any investment in these securities. | |
D. | investors would choose the one with the largest face value. | |
E. | investors would choose the cheaper one to make the most capital gain as possible. |
Which of the following statements is correct?
Consider a given bond yield on a yield curve. A year later, considering the same government bond, __________________________.
A. | the yield of this bond has shifted to the right, away from the y axis, but one cannot tell if it goes up or down. | |
B. | the yield of this bond has shifted to the left, towards the y axis, but one cannot tell if it goes up or down. | |
C. | the yield of this bond has shifted to the left, towards the y axis, and up. | |
D. | the yield of this bond has shifted to the right, away from the y axis, and down. | |
E. | the yield of this bond has shifted to the right, away from the y axis, and up. |
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