Each Bond in the Table Has a Face Value of $100.The

question 21

Multiple Choice

Each bond in the table has a face value of $100.The coupon bonds pay annual coupons,and the next coupon is due in one year.Assume that the yield curve is flat and all yields are currently 3.5%.If interest rates are forecast to rise to 4% from 3.5%,then which bond's price will decline by the greatest percentage amount?

• A) T-Note Strip
• B) T-Bill
• C) 8-year T-Note
• D) 7-year T-Note

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