Question
Consider two 10% coupon paying bonds (A and B) with $1,000 face value each, issued by the same corporation at the same time. Bond A
Consider two 10% coupon paying bonds (A and B) with $1,000 face value each, issued by the same corporation at the same time. Bond A matures in 1 years and Bond B matures in 10 years. Which of the bonds is less sensitive to interest rate risk?
a. Not enough information to make a conclusion.
b. Both bonds are equally sensitive to interest rate risk.
c. Bond A.
d. Bond B.
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AS Accounting For AQA
Authors: David Cox,Michael Fardon
2nd Edition
1905777140, 978-1905777143
