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All else equal, which of the following bonds would give you the highest capital gain return if interest rates (yields) fall 2 percentage points from
All else equal, which of the following bonds would give you the highest capital gain return if interest rates (yields) fall 2 percentage points from 7% to 5%?
a.6% coupon, 20-year maturity bond
b.6% coupon, 2-year maturity bond
c.3% coupon, 20-year maturity bond
d.3% coupon, 2-year maturity bond
e.Zero coupon, 20-year maturity bond
f.Zero coupon, 2-year maturity bond
could you show how to find the different yields of each option as I need to know how for my test, thank you!
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