Business, 20.03.2020 10:14 itssamuelu

How many of the following statements are correct? As interest rates increase, longer term bonds will see their prices increase by more than shorter term bonds. Reinvestment rate risk occurs when interest rates fall and coupon payments are reinvested at these lower rates.

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Answer from: Tyrant4life

Reinvestment rate risk occurs when interest rates fall and coupon payments are reinvested at these lower rates.

Explanation:

One of the following statements is correct, which is that reinvestment rate risk occurs when interest rates fall and coupon payments are reinvested at these lower rates.

Reinvestment rate risk communicates the fact that coupon payments and earned interest income may not be reinvested at the prevailing market rate, hence the name 'reinvestment risk'

It is false that as interest rates increase, longer term bonds will see their prices increase by more than shorter term bonds because interest rates have an inverse relationship with bond price. As interest rate increases, bond rice falls and the risk of interest rate fluctuations is higher in longer term bonds because they face a higher probability of interest rate fluctuations, hence their price falls more than short term bonds.

Answer from: jjcooper05

As interest rates increase, longer term bonds will see their prices increase by more than shorter term bonds.

Long-term bonds are always subject to greater interest rate risk, which means that changes in the market interest rate will change their market value more than short-term bond. This happens because any change in the market rate will affect them for a longer period of time, e.g. if market rates increase, the market value of long-term bonds will decrease more than short-term bonds.

Reinvestment rate risk occurs when interest rates fall and coupon payments are reinvested at these lower rates.

Reinvestment risk refers to the risk that coupon payments will not be invested at the same coupon rate. As market rates decrease, reinvestment risk increases because money received as coupon payments will yield lower interests than the bond itself.

Answer from: Quest

it's actually a very difficult task, due to not many people can make 2 million dollars in 2 years. besides that, to the not-so-realistic ideas, you can create a business. it could be practically anything, but make it into a business that isn't that known yet, you get me? also, lets not forget about stock market. that's where all the good stuff happens. use investments at the beginning and begin to raise up your business or whatever you're going to do. as this is a very non-realistic idea, it's still worth the shot!

Answer from: Quest

answer; because of bogus job sites,never share your dob on social media or job site,don't provide your s/s number on a web site;

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