Which of the Following Bonds Would Have the Greatest Percentage

question 21

Multiple Choice

Which of the following bonds would have the greatest percentage increase in value if all interest rates in the economy fall by 1%?

• A) 10-year,zero coupon bond.
• B) 20-year,10% coupon bond.
• C) 20-year,5% coupon bond.
• D) 1-year,10% coupon bond.
• E) 20-year,zero coupon bond.

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