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

question 24

Multiple Choice

Which of the following bonds will be most sensitive to a change in interest rates if all bonds have the same initial yield to maturity?

• A)a ten-year bond with a $1000 face value whose coupon rate is 5.8% APR paid semi-annually
• B)a ten-year bond with a $1000 face value whose coupon rate is 7.4% APR paid semi-annually
• C)a 20-year bond with a $1000 face value whose coupon rate is 5.8% APR paid semi-annually
• D)a 20-year bond with a $1000 face value whose coupon rate is 7.4% APR paid semi-annually
• E)a 15-year bond with a $1000 face value whose coupon rate is 6.6% APR paid semi-annually