This question has TWO parts. Please be sure to scroll down and make sure you answer both parts. Which of the following bonds will be most sensitive to a change in interest rates if all bonds have the same initial yield to maturity? O A. a 10-year bond with a $1,000 face value whose coupon rate is 4.7% APR paid semiannually OB. a 20-year bond with a $1,000 face value whose coupon rate is 8.1% APR paid semiannually OC. a 20-year bond with a $1,000 face value whose coupon rate is 4.7% APR paid semiannually OD. a 10-year bond with a $1,000 face value whose coupon rate is 8.1% APR paid semiannually A measurement of the sensitivity of a bond's price to changes in interest rates is known as: (choose the most appropriate answer below) OA. Duration OB. Yield to Maturity (YTM) OC. Repayment Risk D. Credit Risk
This question has TWO parts. Please be sure to scroll down and make sure you answer both parts. Which of the following bonds will be most sensitive to a change in interest rates if all bonds have the same initial yield to maturity? O A. a 10-year bond with a $1,000 face value whose coupon rate is 4.7% APR paid semiannually OB. a 20-year bond with a $1,000 face value whose coupon rate is 8.1% APR paid semiannually OC. a 20-year bond with a $1,000 face value whose coupon rate is 4.7% APR paid semiannually OD. a 10-year bond with a $1,000 face value whose coupon rate is 8.1% APR paid semiannually A measurement of the sensitivity of a bond's price to changes in interest rates is known as: (choose the most appropriate answer below) OA. Duration OB. Yield to Maturity (YTM) OC. Repayment Risk D. Credit Risk
Essentials Of Investments
11th Edition
ISBN:9781260013924
Author:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Publisher:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Chapter1: Investments: Background And Issues
Section: Chapter Questions
Problem 1PS
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Transcribed Image Text:This question has TWO parts. Please be sure to scroll down and make sure you answer both parts.
Which of the following bonds will be most sensitive to a change in interest rates if all bonds have the same initial yield to maturity?
O A. a 10-year bond with a $1,000 face value whose coupon rate is 4.7% APR paid semiannually
OB. a 20-year bond with a $1,000 face value whose coupon rate is 8.1% APR paid semiannually
OC. a 20-year bond with a $1,000 face value whose coupon rate is 4.7% APR paid semiannually
OD. a 10-year bond with a $1,000 face value whose coupon rate is 8.1% APR paid semiannually
...
A measurement of the sensitivity of a bond's price to changes in interest rates is known as: (choose the most appropriate answer below)
OA. Duration
OB. Yield to Maturity (YTM)
OC. Repayment Risk
OD. Credit Risk
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