Which Bond Would Most Likely Possess the Highest Degree of Interest

question 105

Multiple Choice

Which bond would most likely possess the highest degree of interest rate risk?

• A) 8% coupon rate, 10 years to maturity
• B) 8% coupon rate, 20 years to maturity
• C) 10% coupon rate, 10 years to maturity
• D) 10% coupon rate, 20 years to maturity
• E) 12% coupon rate, 20 years to maturity

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Definitions:

Mestizos

Individuals of mixed European and Indigenous American descent, a term primarily used in Latin America to describe a major cultural and demographic group.

Caravel

A fifteenth-century European ship capable of long-distance travel.

Pueblo Revolt

A 1680 uprising of indigenous Pueblo people against Spanish colonizers in present-day New Mexico, aiming to restore native autonomy and cultural practices.

Christopher Columbus

An Italian explorer sponsored by Spain who embarked on transatlantic voyages that led to the widespread awareness of the American continents in Europe during the late 15th century.