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Author Question: ABC company has two bonds outstanding that are the same except for the maturity date. Bond D matures ... (Read 147 times)

dejastew

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on: Jul 10, 2018
ABC company has two bonds outstanding that are the same except for the maturity date. Bond D matures in 4 years, while Bond E matures in 7 years. If the required return changes by 5 percent, then ________.
 
  A) bond D will have a greater change in price
  B) bond E will have a greater change in price
  C) the price of the bonds will be constant
  D) the percentage price change for the bonds will be equal

Question 2

If a manager requires greater return when risk increases, then he is said to be ________.
 
  A) risk-seeking
  B) risk-indifferent
  C) risk-averse
  D) risk-aware


asdfghjkl;

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Reply #1 on: Jul 10, 2018
Answer to Question 1

B

Answer to Question 2

C


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