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

question 9

Multiple Choice

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

• A)a ten-year bond with a $2000 face value whose yield to maturity is 5.8% and coupon rate is 5.8% APR paid semi-annually
• B)a 15-year bond with a $5000 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 $3000 face value whose yield to maturity is 6.0% and coupon rate is 5.4% APR paid semi-annually
• D)a 30-year bond with a $1000 face value whose yield to maturity is 5.5% and coupon rate is 6.4% APR paid annually
• E)a 25-year bond with $4000 face value whose yield to maturity is 6.2% and coupon rate is 5.6% APR paid annually

---

Definitions:

Naturalized

Pertains to a process by which a foreign citizen acquires citizenship of another country, often through a legal procedure after fulfilling certain requirements.

Symbolic Groupings

Social categories or groups that are recognized and differentiated based on cultural, ethnic, or symbolic markers rather than strictly physical or biological characteristics.

Historical Contexts

Refers to the specific social, cultural, economic, and political circumstances or events surrounding a particular topic, era, or occurrence, providing deeper understanding or meaning.

Johnson-Reed Act

A U.S. federal law enacted in 1924 that established quotas limiting the number of immigrants allowed from each country, effectively restricting non-European immigration.