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Which of the following bonds is most sensitive to changes in interest rates?
Related Topics
Wize University Introduction to Finance Textbook > Bond Valuation
Interest Rate Risk
3 Activities
Which of the following bonds is most sensitive to changes in interest rates?
A) A 5-year bond with a 3% coupon rate and a yield to maturity of 6%
B) A 30-year bond with a 5% coupon rate and a yield to maturity of 8%
C) A 20-year bond with a 7% coupon rate and a yield to maturity of 8%
D) A 30-year bond with a 3% coupon rate and a yield to maturity of 8%
I don't know
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More Interest Rate Risk Questions:
Which of the following bonds would experience the largest decrease in price if interest rates rise by 1%?
Which of the following bonds would experience the smallest decrease in price if interest rates rise by 1%?
Which of the following statements is correct?
WIZE Corp has 8.75 percent coupon bonds yielding of 9.25 percent. The bonds have twenty years to mature and make semi-annual interest payments. What is the percentage change in price for a 10 percent increase in the yield to maturity?
Which of the following bonds is least sensitive to changes in interest rates?
Which of the following factors does not determine a bond's interest rate sensitivity?
WIZE Corp has 8.75 percent coupon bonds yielding of 9.25 percent. The bonds have twelve years to mature and make annual interest payments. What is the percentage change in price for a 150 basis point decrease in the yield?