Bond’s Maturity Assignment
February 18th, 2020
How many of the statements below is/are correct?
I. The longer a bond’s maturity, the greater is the positive rate of return that occurs as a result of the increase in the interest rate.
II. The price of a bond and the yield to maturity are negatively related (inversely related)
III. Prices and returns for short‐term bonds are less volatile (riskier) than those for longer term bonds.
IV. A fall in interest rates results in capital losses for bonds.
E. None. Get Finance homework help today