Assignment 07-Bonds and Their Valuation The curves on the following graph show the prices of two 105 annual coupon bonds at various interest rates BONO VALUE 151 1216 INTEREST RATE IN Based on the graph, which of the following statements is true? The 1-year bond has more interest rate risk Both bonds have equal interest rate risk. The 10-year bond has more interest rate nisk. Neither band has any interest rate risk An investor is concerned that a decline in interest rates might lead to annual income from her investments. If interest rates the value of earnings from her investments will increase of her goal is to save for retirement, which of the following bonds poses the biggest risk? O A 20-year ro-coupon bond O A 20 year, 10% coupon bond A 30 year, 10% coupon bond O A 20 year, 10% coupon bond that may be called in 10 years Answer the following in based on your understanding of interest rate risk and restment ruterisk True or False Assuming wi n the shorter bond's maturity, the more pre will change in response to a given change in interest rates. O False True