Assuming Other Things Are Held Constant, Which of the Following

Multiple Choice

Assuming other things are held constant, which of the following is correct?

A) The change in the price of a bond due to a change in the interest rate is more significant in bonds with longer maturity periods.
B) For a bond of any maturity, a given percentage point increase in the interest rate causes a larger dollar capital gain than the capital loss stemming from an identical decrease in the interest rate.
C) For any given maturity, a percentage point decrease in the interest rate causes a smaller dollar capital loss than the capital gain stemming from an identical increase in the interest rate.
D) In the year of purchase of bonds, an investor gets a deduction for the difference in the market value of bonds purchased at a premium and the face value of the bonds.
E) A 20-year bond has more interest rate reinvestment risk than a two-year bond.