Coupon reinvestment risk increases with if interest rates, Financial Management

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Coupon reinvestment risk increases with if interest rates

1. Coupon reinvestment risk increases with

a. Lower coupon/shorter reinvestment period

b. Higher coupon/longer reinvestment period

c. Coupon and reinvestment period have no impact

2. If interest rates rise the price of a bond will

a. Rise

b. Stay the same

c. Decline

3. If interest rates rise, the value of reinvested coupons

a. Rise

b. Stay the same

c. Decline

4. Bond capital gains are measured from

a. Purchase price

b. Carrying value

c. Coupon rate

d. Sale price

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Financial Management: Coupon reinvestment risk increases with if interest rates

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