Its Yield to Maturity Declined by 1%, Which of the Following

question 8

Multiple Choice

its yield to maturity declined by 1%, which of the following bonds would have the largest percentage increase in value?

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

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Definitions:

Leading Indicators

Economic factors that change before the economy starts to follow a particular trend, used to predict the future movements of an economy.

Strategic Initiatives

Action plans that management implements to achieve strategic objectives.

Strategic Objectives

The specific, measurable goals that a company aims to achieve in order to execute its strategy and achieve its long-term vision.

Balanced Scorecard

A strategic planning and management system used to align business activities to the vision and strategy of the organization.