Bond X and Bond Y have identical terms to maturity and same coupon rate. However, Bond X is very risky with a credit rating of C, while Bond Y is much safer with a credit rating of AAA. Assuming no change in credit spreads, which bond will be MORE sensitive to changes in interest rates?

[Hint: Riskier bonds will have higher yield and think about the curvature in the price-yield relationship curve]

Group of answer choices

A.Bond X

B. Bond Y

C. Both will have same sensitivity.

D. Cannot be determined.