If Its Yield to Maturity Declined by 1%, Which of the Following

question 82

Multiple Choice

If its yield to maturity declined by 1%, which of the following bonds would have the largest percentage increase in value?

• A) A 1-year bond with an 8% coupon.
• B) A 10-year bond with an 8% coupon.
• C) A 10-year bond with a 12% coupon.
• D) A 10-year zero coupon bond.
• E) A 1-year zero coupon bond.

---

Definitions:

Stress

Any circumstances that threaten or are perceived to threaten one’s well-being and thereby tax one’s coping abilities.

Preparedness

The state of being ready and well-prepared for specific situations or events.

Ego Comparison History

Referring to an individual's history of comparing their self-image or achievements to those of others, potentially impacting self-esteem and behavior.

Learning History

A record of an individual's experiences or events that have influenced their behavior, understanding, or skills.