If the Yield to Maturity Decreased 1 Percentage Point, Which

question 87

Multiple Choice

If the yield to maturity decreased 1 percentage point, which of the following bonds would have the largest percentage increase in value?

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

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Definitions:

Extroversion

A personality trait characterized by sociability, talkativeness, assertiveness, and high levels of emotional expressiveness.

Choleric

A temperament characterized by a fast, active response to stimuli, often indicative of a person prone to be more easily angered or bad-tempered.

Melancholic

A temperament characterized by deep, pensive sadness or contemplation, often connected to artistic or creative endeavors.

Phlegmatic

A temperament characterized by a calm, reliable, and even-keeled personality, often associated with a high threshold for emotional excitability.