All three statements are true.

• I. True — Bonds with lower reinvestment exposure generally have more of their value concentrated in the final repayment, which tends to correspond to higher price sensitivity / duration, all else equal.
• II. True — Realized return depends on the actual reinvestment rate earned on interim cash flows, so it often differs from the bond’s quoted yield-to-maturity.
• III. True — A zero-coupon bond has no periodic coupon payments, so there are no interim cash flows to reinvest; therefore reinvestment risk is eliminated.

Correct answer: D