Rank the Following Bonds, from Highest to Lowest Interest Rate

question 88

Multiple Choice

Rank the following bonds, from highest to lowest interest rate risk: 2-year zero-coupon, 2-year 5 percent coupon bond, 30-year 5 percent coupon bond, 30-year, zero-coupon bond.

• A)30-year, zero-coupon bond, 30-year 5 percent coupon bond, 2-year 5 percent coupon bond, 2-year zero-coupon bond
• B)2-year 5 percent coupon bond, 2-year zero-coupon bond, 30-year 5 percent coupon bond, 30-year zero-coupon bond
• C)30-year, zero-coupon bond, 30-year 5 percent coupon bond, 2-year zero-coupon bond, 2-year 5 percent coupon bond
• D)30-year, 5 percent coupon bond, 30-year zero-coupon bond, 2-year 5 percent coupon bond, 2-year zero-coupon bond

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