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

question 10

Multiple Choice

Which of the following bonds will be most sensitive to a change in interest rates if all bonds have the same initial yield to maturity?

• A) a ten-year bond with a $1000 face value whose coupon rate is 5.8% APR paid semiannually
• B) a 20-year bond with a $1000 face value whose coupon rate is 7.4% APR paid semiannually
• C) a 20-year bond with a $1000 face value whose coupon rate is 5.8% APR paid semiannually
• D) a ten-year bond with a $1000 face value whose coupon rate is 7.4% APR paid semiannually

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Definitions:

Myers-Briggs Type Indicator

A personality inventory that categorizes individuals into one of 16 personality types based on preferences in how they perceive the world and make decisions.

Sensation-Seeking Scores

Measures used to quantify an individual's propensity to seek varied, novel, complex, and intense sensations and experiences.

Jung

Jung, typically referring to Carl Jung, is a Swiss psychiatrist and psychoanalyst who founded analytical psychology, known for concepts like the collective unconscious and archetypes.

Extraversion

A personality trait characterized by outgoingness, high energy, and a preference for social interactions and external stimulation.