Which of the Following Bonds Will Be Most Sensitive to a Change

question 51

Multiple Choice

Which of the following bonds will be most sensitive to a change in interest rates?

• A) a 15-year bond with a $5000 face value whose yield to maturity is 7.4% and coupon rate is 6.2% APR paid annually
• B) a ten-year bond with a $2000 face value whose yield to maturity is 5.8% and coupon rate is 5.8% APR paid semiannually
• C) a 30-year bond with a $1000 face value whose yield to maturity is 5.5% and coupon rate is 6.4% APR paid annually
• D) a 20-year bond with a $3000 face value whose yield to maturity is 6.0% and coupon rate is 5.4% APR paid semiannually

---

Definitions:

Political Philosophies

The study of fundamental questions about the state, government, politics, liberty, justice, and the enforcement of a legal code by authority.

Formal Operations

The final stage in Piaget's theory of cognitive development, occurring from around age 12 onwards, where individuals develop the ability to think abstractly, logically, and systematically.

Object Existence

A cognitive development concept where an individual realizes that objects continue to exist even when they are out of sight or perception.

Stage-Like Fashion

A manner of development or progression in distinct stages or phases.