Academic Integrity: tutoring, explanations, and feedback — we don’t complete graded work or submit on a student’s behalf.

Which of the following theorem explains the relationship between interest rates

ID: 2725527 • Letter: W

Question

Which of the following theorem explains the relationship between interest rates and bond prices? For a given change in interest rates, the prices of higher-coupon bonds will change more drastically than the prices of lower-coupon bonds. For a given change in interest rates, the prices of long-term bonds will change more drastically than the prices of short-term bonds. Bond prices are directly related to interest rate movements. For a given change in interest rates, the prices of short-term bonds will change more drastically than the prices of long-term bonds.

Explanation / Answer

For a given change in interest rates, the prices of short-term bonds will change more drastically than the prices of long-term bonds.

Hire Me For All Your Tutoring Needs
Integrity-first tutoring: clear explanations, guidance, and feedback.
Drop an Email at
drjack9650@gmail.com
Chat Now And Get Quote