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

question 89

Multiple Choice

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

• A) a ten-year bond with a $2,000 face value whose yield to maturity is 5.8% and coupon rate is 5.8% APR paid semiannually
• B) a 15-year bond with a $5,000 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 $3,000 face value whose yield to maturity is 6.0% and coupon rate is 5.4% APR paid semiannually
• D) a 30-year bond with a $1,000 face value whose yield to maturity is 5.5% and coupon rate is 6.4% APR paid annually

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Definitions:

Allergen

A normally harmless substance that provokes an immune response in some people.

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Relating to narcissism, characterized by an excessive interest in or admiration of oneself and one's physical appearance.

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A metaphorical barrier that represents unseen obstacles or social limitations that impede progress or access.

Erich Fromm

A renowned psychoanalyst and social psychologist known for his theories on personality, love, and behavior.