If Its Yield to Maturity Declined by 1%, Which of the Following

question 82

Multiple Choice

If its yield to maturity declined by 1%, which of the following bonds would have the largest percentage increase in value?

• A) A 1-year bond with an 8% coupon.
• B) A 10-year bond with an 8% coupon.
• C) A 10-year bond with a 12% coupon.
• D) A 10-year zero coupon bond.
• E) A 1-year zero coupon bond.

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Definitions:

Business Invitee

A person, such as a customer or a client, who is invited onto business premises by the owner of those premises for business purposes.

Business Premises

The buildings and land where a business operates, including offices, factories, retail stores, and other facilities.

Business Purposes

refers to the intentions or objectives that are undertaken for commercial gain or organizational benefit.

Paralegal Work

Involves performing legal tasks and offering support services under the guidance of an attorney, without being qualified as an attorney themselves.