Which of the Following Combinations Is Ensured to Decrease the Interest

question 37

Multiple Choice

Which of the following combinations is ensured to decrease the interest rate sensitivity of a bond?

• A)Increase in both the time to maturity and the coupon rate
• B)Increase in the time to maturity and a decrease in the coupon rate
• C)Decrease in both the time to maturity and the coupon rate
• D)Decrease in the time to maturity and an increase in the coupon rate
• E)Decrease in the time to maturity and an increase in the face value

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