As bond maturity increases, the bond's risk: OA. B. OC. O D. O E. Increases Decreases Does not change Sometimes increases and sometimes decreases Is inversely related to the value of the bond
As bond maturity increases, the bond's risk: OA. B. OC. O D. O E. Increases Decreases Does not change Sometimes increases and sometimes decreases Is inversely related to the value of the bond
Essentials Of Investments
11th Edition
ISBN:9781260013924
Author:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Publisher:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Chapter1: Investments: Background And Issues
Section: Chapter Questions
Problem 1PS
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Transcribed Image Text:Question 23
As bond maturity increases, the bond's risk:
O A.
B.
C.
D.
E.
Increases
Decreases
Does not change
Sometimes increases and sometimes decreases
Is inversely related to the value of the bond
Expert Solution
Step 1
A bond is a debt instrument used to raise capital from investors. It pays back the lender in the form of coupons and face value. It is one of the most used methods of debt financing.
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