Which of the Following Bonds Will Be Most Sensitive to a Change

question 89

Multiple Choice

Which of the following bonds will be most sensitive to a change in interest rates?

• A) a ten-year bond with a $2,000 face value whose yield to maturity is 5.8% and coupon rate is 5.8% APR paid semiannually
• B) a 15-year bond with a $5,000 face value whose yield to maturity is 7.4% and coupon rate is 6.2% APR paid annually
• C) a 20-year bond with a $3,000 face value whose yield to maturity is 6.0% and coupon rate is 5.4% APR paid semiannually
• D) a 30-year bond with a $1,000 face value whose yield to maturity is 5.5% and coupon rate is 6.4% APR paid annually

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Definitions:

Astrocytes

Star-shaped glial cells in the brain and spinal cord involved in providing structural and metabolic support to neurons.

Unipolar

Refers to a type of neuron in which only one neurite extends from the cell body, commonly found in insects.

Multipolar

Referring to a type of neuron that has one axon and multiple dendrites, allowing for the integration of a lot of information from various sources.

Drastically Reduced

Significantly decreased or lessened in size, amount, or intensity in a very noticeable or extreme way.