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QUESTIONS Q: 1 "The value of outstanding bond change, whenever the going rate of interest changes. In general, short-term interest rates are more

The value of outstanding bond change, whenever the going rate of interest changes. In general, short-term interest rates are more volatile than long-term interest rates. Therefore short-term bond prices are more sensitive to interest rate changes than are long term bond prices.” Is this statement true or false? Explain.
QUESTIONS Q: 1 “The value of outstanding bond change, whenever the going rate of interest changes. In general, short-term interest rates are more volatile than long-term interest rates. Therefore short-term bond prices are more sensitive to interest rate changes than are long term bond prices.” Is this statement true or false? Explain. (More than 100 words) Q: 2 What are call provisions and sinking fund provisions? Do these provisions make bonds more or less risky? (40 – 60 words) Q: 3 What is reinvestment rate risk? Which has more investment rate risk, a 1 year bond or a 10 year bond? (30 – 50 words) Q: 4 What does market equilibrium mean? (10 – 15 words)
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