Which of the following statements regarding a bonds time to

Which of the following statements regarding a bond\'s time to maturity is true?

Question 17 options:

United States Treasury Bonds have maturities between six to twelve years.

A bond with a shorter maturity generally has a higher price than one with a longer maturity.

The fair price of a \"straight bond\" is the sum of its discounted expected cash flows.

All of these answers.

Solution

A bond with a shorter maturity generally has a higher price than one with a longer maturity.

A longer term bond increases the risk to the bondholder which decreases the price of the bond.