Question
Bond A has a time to maturity of 16 years and a duration of 12.98 years. Bond B has a time to maturity of 15
Bond A has a time to maturity of 16 years and a duration of 12.98 years. Bond B has a time to maturity of 15 years and a duration of 13.12 years. Which bond has more interest rate risk and why?
| A. | Bond A because it has the longer time to maturity | |
| B. | Bond B because it has the shorter time to maturity | |
| C. | Bond A because it has the shorter duration | |
| D. | Bond B because it has the longer duration |
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Handbook Of Financial Intermediation And Banking
Authors: Anjan V. Thakor, Arnoud Boot
1st Edition
0444515585, 978-0444515582
