Which of the Following Two Bonds Is More Price Sensitive

question 26

Multiple Choice

Which of the following two bonds is more price sensitive to changes in interest rates
1) A par value bond, D, with a 2-year-to-maturity and a 8% coupon rate.
2) A zero-coupon bond, E, with a 2-year-to-maturity and a 8% yield to maturity.

• A)Bond D because of the higher yield to maturity.
• B)Bond E because of the longer duration.
• C)Bond D because of the longer time to maturity.
• D)Both have the same sensitivity because both have the same yield to maturity.

---

Definitions:

Same-sex Parenting

The act of raising children by parents who identify as the same gender, whether through biological means, adoption, or surrogacy.

U.S. Region

Any area within the United States characterized by geographic, cultural, or economic similarities, often used in analyses of demographic or sociopolitical trends.

Childrearing

The process of bringing up and nurturing children, including aspects of education, discipline, and provision of emotional support.

Racial Group

A category of people who share common inherited physical or biological traits, socially defined by society, and can influence individuals' identities and experiences.