Rank the Interest Sensitivity of the Following from the Most

question 74

Multiple Choice

Rank the interest sensitivity of the following from the most sensitive to an interest rate change to the least sensitive:
I. 8% coupon, noncallable 20-year maturity par bond
II. 9% coupon, currently callable 20-year maturity premium bond
III. Zero-coupon 30-year maturity bond

• A) I, II, III
• B) II, III, I
• C) III, I, II
• D) III, II, I

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Definitions:

Systems Theory

An interdisciplinary theory about the nature of complex systems in nature, society, and science, aiming to understand how such systems function and adapt.

Interactions

The reciprocal action or influence between two or more entities in a particular environment.

Compromising Style

A conflict resolution approach where parties involved make concessions to reach a mutually acceptable agreement.

Moderate Concern

A level of interest or care that is neither too indifferent nor too passionate, often seen as a balanced or reasonable position.