Assume that interest rates exhibit an unexpected increase, Ask an Expert

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Assume that interest rates exhibit an unexpected increase of 1%, in general, we would expect bond prices to ________. However, we would likely see that the price change of ________ time-to-maturity bonds be greater than the price change of ________ time-to-maturity bonds due to coupon repayment uncertainty.

a. Decrease, Longer, Shorter

b. Decrease, Shorter, Longer

c. Increase, Longer, Shorter

d. Increase, Shorter, Longer

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Financial Management, Finance

Category:- Financial Management
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