Which of the Following Bonds Has the Greatest Interest Rate

question 78

Multiple Choice

Which of the following bonds has the greatest interest rate price risk?

• A) A 10-year, $1,000 face value, zero coupon bond.
• B) A 10-year, $1,000 face value, 10% coupon bond with annual interest payments.
• C) All 10-year bonds have the same price risk since they have the same maturity.
• D) A 10-year, $1,000 face value, 10% coupon bond with semiannual interest payments.

---

Definitions:

Polar Ice Cap

A large area of thick ice covering the North Pole, South Pole, or both, significantly influencing the Earth's climate.

Boreal Forests

Vast forests located in the northern regions, characterized by cold temperatures and coniferous trees, also known as taiga.

Tundra

A cold, treeless biome characterized by low temperatures, short vegetation, and a short growing season, found in high latitude regions.

Profundal Zone

A deep zone in a body of water where sunlight does not penetrate, often characterized by cold temperatures and low oxygen levels.