Question
a.
Bond prices rise when interest rates rise
b.
Bond prices fall when interest rates rise
c.
Interest-rate changes have no impact on bond prices
d.
Longer-duration bonds are less sensitive to interest-rate changes
Posted under IC 89 Management Accounting
Interact with the Community - Share Your Thoughts
Uncertain About the Answer? Seek Clarification Here.
Understand the Explanation? Include it Here.
Q. How does interest-rate risk affect bond prices and debt funds in portfolio management?
Similar Questions
Explore Relevant Multiple Choice Questions (MCQs)
Q. What is advisable when investing in longer-duration bonds in the context of interest-rate expectations?
View solution
Q. How did bond yields and NAVs of debt funds react when the RBI did not hike interest rates as expected?
View solution
Q. What is the lock-in period for the Public Provident Fund (PPF)?
View solution
Q. What is a key advantage of tax-free bonds?
View solution
Q. Why might investors consider moving higher up the risk ladder for fixed income investments?
View solution
Q. What is a potential drawback of Company Fixed Deposits and NCDs?
View solution
Q. What is one of the prime reasons for the historical popularity of bank Fixed Deposits (FDs)?
View solution
Q. What is the primary objective of Fixed Maturity Plans (FMPs)?
View solution
Q. How do Fixed Maturity Plans (FMPs) differ from traditional Fixed Deposits (FDs)?
View solution
Q. What is the tax treatment of Fixed Maturity Plans (FMPs)?
View solution
Q. Why are short-term debt funds considered a good option for stable and higher returns?
View solution
Q. What is a key consideration for investors in Fixed Maturity Plans (FMPs)?
View solution
Q. Why are returns in Fixed Maturity Plans (FMPs) considered indicative and not assured?
View solution
Q. What is a characteristic of Fixed Maturity Plans (FMPs) that makes them suitable for low-risk attractive yield investments?
View solution
Q. How do Fixed Maturity Plans (FMPs) compare to Fixed Deposits (FDs) in terms of returns?
View solution
Q. What tax advantage do Fixed Maturity Plans (FMPs) offer over Fixed Deposits (FDs)?
View solution
Q. For what duration of Fixed Maturity Plans (FMPs) does indexation benefit apply?
View solution
Q. What is the double indexation benefit associated with Fixed Maturity Plans (FMPs)?
View solution
Q. How can losses incurred in Fixed Maturity Plans (FMPs) after double indexation be treated?
View solution
Q. What types of instruments do Fixed Maturity Plans (FMPs) typically invest in?
View solution
Recommended Subjects
Are you eager to expand your knowledge beyond IC 89 Management Accounting? We've handpicked a range of related categories that you might find intriguing.
Click on the categories below to discover a wealth of MCQs and enrich your understanding of various subjects. Happy exploring!