The coupon on the variable interest rate bond varies with changes in interest rates. Question 10 options: a) True b) False Save Question 11 (2.5

The coupon on the variable interest rate bond varies with changes in interest rates.

Question 10 options:

	a)	True
	b)	False

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Question 11 (2.5 points)

A call penalty is a payment made to the firm to encourage early retirement of the bond.

Question 11 options:

	a)	True
	b)	False

Question 12 (2.5 points)

If preferred stock is subject to mandatory retirement, its price is more volatile than preferred stock without the retirement feature.

Question 12 options:

	a)	True
	b)	False

Question 13 (2.5 points)

Buying a bond with a duration equal to when the funds are needed

Question 13 options:

	a)	reduces reinvestment rate risk
	b)	increases impact of higher interest rates
	c)	reduces the impact of default
	d)	increases the bond's yield

Question 14 (2.5 points)

The concept of duration considers

Question 14 options:

	a)	the timing of interest payments
	b)	the timing of principal repayment
	c)	the current rate of interest
	d)	the timing of both interest and principal repayment

The coupon on the variable interest rate bond varies with changes in interest rates. A call penalty is a payment made to the firm to encourage early retirement of the bond. If preferred stock is subject to mandatory retirement, its price is more volatile than preferred stock without the retirement feature. Buying a bond with a duration equal to when the funds are needed The concept of duration considers