Which of the Following Statements Is CORRECT

question 20

Multiple Choice

Which of the following statements is CORRECT?

• A) A zero coupon bond of any maturity will have more interest rate price risk than any coupon bond, even a perpetuity.
• B) If their maturities and other characteristics were the same, a 5% coupon bond would have more interest rate price risk than a 10%
• Coupon bond.
• C) A 10-year coupon bond would have more reinvestment rate risk than a 5-year coupon bond, but all 10-year coupon bonds have the same
• Amount of reinvestment rate risk.
• D) A 10-year coupon bond would have more interest rate price risk than a 5-year coupon bond, but all 10-year coupon bonds have the same
• Amount of interest rate price risk.
• E) If their maturities and other characteristics were the same, a 5% coupon bond would have less interest rate price risk than a 10%
• Coupon bond.

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