If its yield to maturity declined by 1%, which of the following bonds would have the largest percentage increase in value? A 1-year zero coupon bond. A 1-year bond with an 8% coupon. A 10-year bond with an 8% coupon. A 10-year bond with a 12% coupon. A 10-year zero coupon bond.

Essentials Of Investments
11th Edition
ISBN:9781260013924
Author:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
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Chapter1: Investments: Background And Issues
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If its yield to maturity declined by 1%, which of the following bonds would have the largest percentage increase in value?

A 1-year zero coupon bond.
A 1-year bond with an 8% coupon.
A 10-year bond with an 8% coupon.
A 10-year bond with a 12% coupon.
A 10-year zero coupon bond.

 

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