In capital budgeting, term of bond which has great sensitivity to interest rates is
Answer: long-term bonds
Explanation
In capital budgeting, term of bond which has great sensitivity to interest rates is long-term bonds. Bond with a maturity period of more than 15 years. Long bonds pay higher interest rates but have greater credit and inflation risk. Also called long bond.
This question appeared in
Past Papers (2 times)
OTS Past Papers (1 times)
ZTBL OG III Past Papers and Syllabus (1 times)
This question appeared in
Subjects (1 times)
ACCOUNTING (1 times)
Related MCQs
- Kyle bought a $2000 government bond that yields 6% in simple interest each year. Write the equation that gives the total amount A, in dollars, Kyle will receive when he sells the bond after t years.
- What does APR stand for in the context of interest rates?
- One who lends money on high rates of interest?
- What is the primary difference between nominal and real interest rates?
- The capital budgeting in which we check in how many year initial investment is cover is called ______?
- Which term describes the interest earned on both the initial principal and the interest that has been added to it?
- Which of the following statement is not correct? (a) Sigma bond is weaker than a pi bond (b) Sigma bond is stronger than a pi bond (c) Double bond is stronger than a single bond (d) Double bond is shorter than a single bond
- Graph which is plotted for projected net present value and capital rates is called
- An automobile financier claims to be lending money at simple interest, but he includes the interest every six months for calculating the principal. If he is charging an interest of 10%, the effective rate of interest becomes :_________?
- Which of the following best describes the term "principal" in interest calculations?