With regard to interest rates and bond prices it can be said that - 4712

Solution Posted by
UoPExpert

UoPExpert

Rating : (2)F
Solution Detail
Price: $1.30
  • From: ,
  • Posted on: Thu 29 Mar, 2012
  • Request id: None
  • Purchased: 0 time(s)
  • Average Rating: No rating
Request Description

With regard to interest rates and bond prices it can be said that 

A) a 1% change in interest rates will cause a greater change in long-term bond prices than short-term prices. 

B) a 1% change in interest rates will cause a greater change in short-term bond prices than long-term prices. 

C) long-term rates are more volatile than short-term rates. 

D) a decrease in interest rates will cause bond prices to fall. 

 

Answer: A Difficulty: Medium Type: Conceptual 

 
Solution Description