Question
Consider the four bonds that pay annual coupons: Bond Yrs to maturity Coupon YTM A 1 0% 5% B 5 6% 7% C 10 10%
Consider the four bonds that pay annual coupons:
| Bond | Yrs 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 1% increase in YTM? Why?
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Income Tax Fundamentals 2013
Authors: Gerald E. Whittenburg, Martha Altus Buller, Steven L Gill
31st Edition
1111972516, 978-1285586618, 1285586611, 978-1285613109, 978-1111972516
