Question $4$

$2$ pts

Select the statement that is most correct.

The longer the maburity of a bond, the more semative the bond wili be to charges in the diacount rate fie. the itvestors' required rabe of reburnd. if interest rates go up$,$ al other factors the same, a bond with a longer time Bo maturity will have a lager caplal loss than an equlvalent bond wich a whorter time Bo mahurity.

exceed its yeld to mahurity $($YTM$).$

A $10-$year bond pirfing a $10$ percent ansual coupon paryment will have. all other things equal, a longer duration thm a $30-$year bond paying the same $10$ percent innual coupon payment.

Recause thry are fixed income securities with prices that wary over time, you will rarely oblerve the expected rate of returs equal to the required rate of return on bonds.

Bonde hecome mare attracthe to Imestors as interet rales increase. This increases demand, which, in furn, cautes the prices of bonds to increase.