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ou are faced with the following alternative fixed-income investments (published CFP question, 1999) A U.S. Treasury bond with 11.625% coupon, due in four years, with
ou are faced with the following alternative fixed-income investments (published CFP question, 1999)
- A U.S. Treasury bond with 11.625% coupon, due in four years, with a price of $142.50 and a yield to maturity of 6.3%
- A U.S. Treasury strip bond (zero-coupon) due in four years, with a price of $46.75 and a yield to maturity of 6.25%
- A corporate B-rated bond with a 9.75% coupon, due in four years, with a price of $104.75 and a yield to maturity of 8.79%
Which of these bonds has the greatest reinvestment risk [ Select ] ["C", "B", "A"] ?
Which of these bonds has the greatest interest rate risk [ Select ] ["B", "A", "C"] ?
Which of these bonds has the longest duration [ Select ] ["C", "B", "A"] ?
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