Use the Following Information to Answer the Question(s)below

question 58

Multiple Choice

Use the following information to answer the question(s) below.Consider the following four corporate bonds that have semiannual compounding:
-If the YTM of these bonds decreases to 7%,which bond's price would be most sensitive to this change in YTM?

• A)#1
• B)#2
• C)#3
• D)#4
• E)#3 and #4

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Definitions:

Ordinary Annuity

A series of equal payments made at fixed intervals for a specified period of time.

Expressed

something that is stated or made known clearly and explicitly.

Financial Calculator

A specialized calculator used for complex financial calculations, including interest rates, loan payments, and investment values.

Expressed

Clearly stated, demonstrated, or articulated in a particular manner.