Which of the following are generally TRUE of bonds?
A) A bond's return equals the yield to maturity when the time to maturity is the same as the holding period.
B) A rise in interest rates is associated with a fall in bond prices, resulting in capital gains on bonds whose terms to maturity are longer than the holding periods.
C) The longer a bond's maturity, the smaller is the size of the price change associated with an interest rate change.
D) Prices and returns for short-term bonds are more volatile than those for longer-term bonds.
A
You might also like to view...
Economic growth is measured by the percentage change in: a. potential nominal GDP
b. structural unemployment. c. the rule of 72. d. potential real GDP (LRAS).
The worst remedy for curing the U.S. trade deficit is to
a. increase U.S. personal saving. b. reduce the budget deficit. c. encourage all nations to lower trade barriers. d. limit imports by imposing tariffs, quotas, and other trade restrictions.
In deciding whether a good is a public good, one must determine the
a. incomes of those who benefit from the good. b. value of the external benefits that accrue to resource owners. c. excludability of the good. d. All of the above are correct.
A stock has an annual dividend of $10.00 and it is expected not to grow. It is believed the stock will sell for $100 one year from now, and an investor has a discount (interest) rate of 6% (0.06). The dividend discount model predicts the stock's current price should be:
A. $103.77 B. $94.67 C. $106.60 D. $116.00