Question
Assume that each bond in the table below is offering the same yield to maturity. Bond Maturity Coupon rate A 30 years 0% B 20
- Assume that each bond in the table below is offering the same yield to maturity.
| Bond | Maturity | Coupon rate |
| A | 30 years | 0% |
| B | 20 years | 12% |
| C | 20 years | 15% |
Which of these three bonds has the greatest reinvestment risk, and which of these bonds has the least reinvestment risk? Explain your answer
- Do you agree or disagree with the following statement and why?
If two bonds have the same modified duration, then the percentage change in the price of the two bonds will be the same for a given change in interest rates.
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Cash Flow Stock Investing
Authors: Randall Stewart
1st Edition
1980883300, 978-1980883302
