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Rank the following bonds in order of descending price sensitivity to changes in interest rates. Provide explanations for the rankings of at least two bonds.
Rank the following bonds in order of descending price sensitivity to changes in interest rates. Provide explanations for the rankings of at least two bonds.
Bond | Coupon | Time to Maturity | Yield to Maturity |
L | 7 | 20 | 8 |
M | 7 | 15 | 10 |
N | 5 | 20 | 8 |
O | 7 | 20 | 10 |
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