If you expect the interest rate to fall, which bond will give you the highest price appreciation? Group of answer choices High coupon, short maturity Zero coupon, short maturity Zero coupon, long maturity High coupon, long maturity

If you expect the interest rate to fall, which bond will give you the highest price appreciation? Group of answer choices High coupon, short maturity Zero coupon, short maturity Zero coupon, long maturity High coupon, long maturity

EBK CONTEMPORARY FINANCIAL MANAGEMENT

14th Edition

ISBN:9781337514835

Author:MOYER

Publisher:MOYER

Chapter6: Fixed-income Securities: Characteristics And Valuation

Section: Chapter Questions

Problem 15QTD

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Question

If you expect the interest rate to fall, which bond will give you the highest price appreciation?

Group of answer choices

High coupon, short maturity

Zero coupon, short maturity

Zero coupon, long maturity

High coupon, long maturity

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