If interest rates fall from 8 percent to 7 percent, which of the following boinds will have the largest percentage increase in its value? (If you are uncertain,do the examples yourselfbefore answering!)

A bond with 10 years to maturity, and a coupon rate of ZERO percent.

A bond with 10 years to maturity, and a coupon rate of TEN percent.

A bond with 5 years to maturity, and a coupon rate of ZERO percent.

A bond with 5 years to maturity, and a coupon rate of TWELVE percent.

None of these. If rates fall from 8 percent to 7 percent, the value of existing bonds willdecreasein value, not increase.