The shorter the amount of time until a bond's maturity, the more ...

[audie]

The shorter the amount of time until a bond's maturity, the more responsive is its market value to a given change in the required return.
 
  Indicate whether the statement is true or false

Question 2

A corporation is selling an existing asset for 21,000. The asset, when purchased, cost 10,000, was being depreciated under MACRS using a five-year recovery period, and has been depreciated for four full years.
 
  If the assumed tax rate is 40 percent on ordinary income and capital gains, the tax effect of this transaction is ________.
  A) 0 tax liability
  B) 7,560 tax liability
  C) 4,400 tax liability
  D) 7,720 tax liability

[bookworm410]

Answer to Question 1

FALSE

Answer to Question 2

D