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Consider the following four bonds that pay annual coupons: Bond Years to Maturity Coupon YTM A 1 0% 5% B 5 6% 7% C 10
Consider the following four bonds that pay annual coupons:
Bond | Years to Maturity | Coupon | YTM |
A | 1 | 0% | 5% |
B | 5 | 6% | 7% |
C | 10 | 10% | 9% |
D | 20 | 0% | 8% |
Which of the four bonds is the most sensitive to a one percent increase in the YTM?
- Bond A
- Bond B
- Bond C
- Bond D
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