Question
Which of the following statements is CORRECT? One advantage of a zero-coupon Treasury bond is that no one who owns the bond has to pay
Which of the following statements is CORRECT?
One advantage of a zero-coupon Treasury bond is that no one who owns the bond has to pay any taxes on it until it matures or is sold. | ||
Long-term bonds have less price risk but more reinvestment risk than short-term bonds. | ||
If interest rates increase, all bond prices will increase, but the increase will be greater for bonds that have less price risk. | ||
Relative to a coupon-bearing bond with the same maturity, a zero-coupon bond has more price risk but less reinvestment risk. | ||
Long-term bonds have less price risk and also less reinvestment risk than short-term bonds. |
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