Which of the Following Bonds Has the Greatest Interest Rate

question 1

Multiple Choice

Which of the following bonds has the greatest interest rate price risk?

• A) A 10-year $100 annuity.
• B) A 10-year, $1,000 face value, zero coupon bond.
• C) A 10-year, $1,000 face value, 10% coupon bond with annual interest payments.
• D) All 10-year bonds have the same price risk since they have the same maturity.
• E) A 10-year, $1,000 face value, 10% coupon bond with semiannual interest payments.

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Definitions:

Separation Anxiety Disorder

A psychological condition in which an individual experiences excessive fear or anxiety about being apart from familiar people or environments.

DSM-5

The Diagnostic and Statistical Manual of Mental Disorders, Fifth Edition, a handbook used by healthcare professionals as the authoritative guide to the diagnosis of mental disorders.

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A chronic mental health condition characterized by intense fear and avoidance of social situations due to a perceived risk of negative evaluation.