(I) Prices of longer-maturity bonds respond more dramatically to changes in interest rates. (II) Prices and returns for long-term bonds are less volatile than those for short-term bonds.
举一反三
- (I) Prices of longer-maturity bonds respond less dramatically to changes in interest rates. (II) Prices and returns for long-term bonds are less volatile than those for shorter-term bonds.
- According to the market segmentation theory of the term structure,________ A: the interest rate for bonds of one maturity is determined by supply and demand for bonds of that maturity. B: bonds of one maturity are not substitutes for bonds of other maturities; therefore, interest rates on bonds of different maturities do not move together over time. C: investors' strong preference for short-term relative to long-term bonds explains why yield curves typically slope upward. D: all of the above. E: none of the above.
- Changes in interest rates make investments in long-term bonds risky.
- If interest rates increase, the prices of bonds and preferred stock increase.
- Bonds whose term to maturity is shorter than the holding period are also subject to _________