Long period of bond maturity leads to_________?
Correct answer: A. More price changes
- A. More price changes
- B. Stable prices
- C. Standing prices
- D. Mature prices
Explanation
A longer-maturity bond has greater interest-rate sensitivity, so its market price changes more when interest rates change. Shorter-maturity bonds generally experience smaller price movements.
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Business finance explains how organisations plan, obtain and use money while balancing risk, return and liquidity. Topics include financial statements, time value of money, budgeting, working capital, capital structure, sources of finance, investment appraisal and cost of capital. Capital budgeting evaluates long-term projects, whereas working capital manages day-to-day operations.
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