Which of the Following Two Bonds Is More Price Sensitive

question 13

Multiple Choice

Which of the following two bonds is more price sensitive to changes in interest rates? 1) A par-value bond, A, with a 12 year to maturity and a 12% coupon rate.
2) A zero-coupon bond, B, with a 12 year to maturity and a 12% yield to maturity.

• A) Bond A because of the higher yield to maturity
• B) Bond A because of the longer time to maturity
• C) Bond B because of the longer duration
• D) Both have the same sensitivity because both have the same yield to maturity.
• E) None of the options are correct.

Comprehend the importance and methods of experiential learning in management development.

Grasp the role of emotional and intellectual intelligence in effective management and leadership.

Understand the various strategies and tools for managing and resolving conflict.

Identify the impact of macro environmental forces on organizational leadership and management development.

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Definitions:

Personality

A mixture of traits and attributes that create a person's unique personality, affecting their actions, feelings, and thinking processes.

Phallic Stage

A phase in Sigmund Freud's theory of psychosexual development, occurring from ages three to six, where the libido’s focus is on the genital organs.

Penis Envy

A controversial psychoanalytic theory proposed by Freud that suggests girls experience anxiety and feelings of inferiority upon realizing they do not have a penis.

Promiscuous

Describes someone who has many casual sexual partners or engages in sexual activities with a variety of partners without seeking emotional connection.