Question
Which of the following bonds is most susceptible to interest rate risk (price risk - - change in price due to change in interest rates)?
Which of the following bonds is most susceptible to interest rate risk (price risk - - change in price due to change in interest rates)?
Explain (max. of 3 sentences).
Bond 1: Zero-coupon bond with 5 years to maturity
Bond 2: 5% coupon bond with 5 years to maturity
Bond 3: 10% coupon bond with 5 years to maturity
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School Finance And Business Management Optimizing Fiscal Facility And Human Resources
Authors: Craig A. Schilling, Daniel R. Tomal
2nd Edition
1475844026, 978-1475844023
