Rank the interest sensitivity of the following from most sensitive (to an interest rate change) to the least sensitive I. 8-year bond with 8.9% coupon rate (payable annually) and YTM =3% EAR II. 7-year bond with 8.9% coupon rate (payable semi-annually) and YTM =3% EAR III. 7-year bond with 8.8% coupon rate (payable daily) and YTM =3% EAR A) I. II. III. B) I. III. II. C) II. III. I. D) III. II. I. E) III. I. II.

Rank the interest sensitivity of the following from most sensitive (to an interest rate change) to the least sensitive I. 8-year bond with 8.9% coupon rate (payable annually) and YTM =3% EAR II. 7-year bond with 8.9% coupon rate (payable semi-annually) and YTM =3% EAR III. 7-year bond with 8.8% coupon rate (payable daily) and YTM =3% EAR A) I. II. III. B) I. III. II. C) II. III. I. D) III. II. I. E) III. I. II.

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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