Consider the following bonds:

Bond	Coupon Rate (annual payments)	Maturity (years)
A	0.0%	15
B	0.0%	10
C	3.9%	15
D	8.2%	10

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

1%

drop in interest rates from

6.5%

to

5.5%?

Which bond is least sensitive?

Question content area bottom

Part 1

Bond

A

B

C

D

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.)