Which of the following statement is correct with regard to, Ask an Expert

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Which of the following statement is correct with regard to bond valuation?

a) All else equal, the longer the time to maturity, the smaller the interest rate risk.

b) All else equal, the higher the coupon rate, the greater the interest rate risk.

c) Spot interest rates are yields to maturity on loan or bonds that pay multiple cash flows to the investor.

d) Bond price will fall as the market interest rate rise, as the present value of the bond’s future cash flows is obtained by discounting at a higher interest rate.

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Financial Management, Finance

Category:- Financial Management
Reference No.:- M91776813

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