consider the following bonds:

Bond

Coupon Rate (annual payments)

Maturity (years)

A

0.0%

15

B

0.0%

10

C

4.0%

15

D

8.0%

10

. Which of the bonds A to D is most sensitive to a

1%

drop in interest rates from

6.0%

to

5.0%?

Which bond is least sensitive?

Question content area bottom

Part 1

Bond

is most sensitive.(Select from the drop-down menu.)

Part 2

Bond

A

B

C

D

is the least sensitive.(Select from the drop-down menu.)