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:

Changes

The act or process through which something becomes different, often leading to new directions in life, behavior, or operation.

Cross-sectional Study

A research method that analyzes data from a population, or a representative subset, at a specific point in time.

Cognitive Changes

Alterations in cognitive functions such as memory, problem-solving, attention, and language abilities that may occur due to aging, brain injury, or neurological conditions.

Simultaneously

Occurring, done, or existing at the same time.