Which of the Following Bonds Would Have the Greatest Percentage

question 71

Multiple Choice

Which of the following bonds would have the greatest percentage increase in value if all interest rates fall by 1%?

• A) 20-year, 10% coupon bond.
• B) 20-year, 5% coupon bond.
• C) 1-year, 10% coupon bond.
• D) 20-year, zero coupon bond.
• E) 10-year, zero coupon bond.

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Definitions:

Current Ratio

The current ratio is a financial metric used to evaluate a company's ability to pay its short-term obligations, calculated by dividing current assets by current liabilities.

Accounts Receivable

Represents the money owed to a company by its customers for products or services that have been delivered but not yet paid for.