If interest rates increase because of a previously unanticipated inflation rate risk? long-lived debt instruments will decline more than short-lived debt instruments long-lived debt instruments will decline less than short-lived debt instruments neither set of debt instruments will decline all other things being equal, both should decline equally
If interest rates increase because of a previously unanticipated inflation rate risk? long-lived debt instruments will decline more than short-lived debt instruments long-lived debt instruments will decline less than short-lived debt instruments neither set of debt instruments will decline all other things being equal, both should decline equally
Chapter16: Working Capital Policy And Short-term Financing
Section: Chapter Questions
Problem 5QTD
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Question
If interest rates increase because of a previously unanticipated inflation rate risk?
long-lived debt instruments will decline more than short-lived debt instruments |
||
long-lived debt instruments will decline less than short-lived debt instruments |
||
neither set of debt instruments will decline |
||
all other things being equal, both should decline equally |
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