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

question 82

Multiple Choice

If 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:

R

In electrical engineering, symbolically represents resistance, the property of a material that opposes the flow of electric current, measured in ohms (Ω).

Z

Often represents impedance in electrical circuits, a measure of opposition to AC including both resistance and reactance.

RC Parallel Circuit

A circuit configuration consisting of a resistor (R) and a capacitor (C) connected in parallel with each other across a power supply.

R

Commonly used to symbolize resistance in electrical equations and diagrams, measured in ohms (Ω).