Which of the Following Bonds Will Be Most Sensitive to Changes

question 27

Multiple Choice

Which of the following bonds will be most sensitive to changes in market interest rates?

• A)8 percent semiannual coupon with 8 years to maturity.
• B)6 percent semiannual coupon with 8 years to maturity.
• C)8 percent semiannual coupon with 6 years to maturity.
• D)6 percent semiannual coupon with 6 years to maturity.

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Definitions:

Straightness

A condition where an element or line maintains a consistent path without deviation, typically applied in manufacturing to ensure parts are within specified tolerances.

Flatness

A geometric tolerance that describes how flat a surface must be within specified limits.

Tertiary Plane

A plane that is oriented to intersect or be parallel with the primary and secondary planes in a three-dimensional coordinate system.

Primary Datum

A reference point, line, or plane from which dimensions are measured in technical drawing or CAD modeling.