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

question 100

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 increased to 9%,which bond's price would be most sensitive to this change in YTM?

• A)#1
• B)#2
• C)#3
• D)#4

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Definitions:

Semiannually

A term describing events or actions that occur twice a year, typically every six months.

Investment Grade

A rating assigned to bonds that indicates they are of high quality and low credit risk.

Bond Grade

The rating assigned to a bond by credit rating agencies, reflecting the issuer's creditworthiness and the bond's risk level.

BBB

A credit rating assigned to bonds that are considered investment-grade, with a moderate risk level.