Which of the Following Bonds Has the Greatest Interest Rate

question 46

Multiple Choice

Which of the following bonds has the greatest interest rate price risk?

• A) A 10-year, $1, 000 face value, zero coupon bond.
• B) A 10-year, $1, 000 face value, 10% coupon bond with annual interest payments.
• C) All 10-year bonds have the same price risk since they have the same maturity.
• D) A 10-year, $1, 000 face value, 10% coupon bond with semiannual interest payments.

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