Question
Which of the following bonds will be least sensitive to a change in interest rates? A. a tenminus year bond with a $2,000 face value
Which of the following bonds will be least sensitive to a change in interest rates?
A.
a
tenminus
year
bond with a $2,000 face value whose yield to maturity is 5.8% and coupon rate is 5.8% APR paid semiannually
B.
a
20minus
year
bond with a $3,000 face value whose yield to maturity is 6.0% and coupon rate is 5.4% APR paid semiannually
C.
a
15minus
year
bond with a $5,000 face value whose yield to maturity is 7.4% and coupon rate is 6.2% APR paid annually
D.
a
30minus
year
bond with a $1,000 face value whose yield to maturity is 5.5% and coupon rate is 6.4% APR paid annually
Step by Step Solution
There are 3 Steps involved in it
Step: 1
![blur-text-image](https://dsd5zvtm8ll6.cloudfront.net/includes/images/document_product_info/blur-text-image.webp)
Get Instant Access with AI-Powered Solutions
See step-by-step solutions with expert insights and AI powered tools for academic success
Step: 2
![blur-text-image](https://dsd5zvtm8ll6.cloudfront.net/includes/images/document_product_info/blur-subtext-image.webp)
Step: 3
![blur-text-image](https://dsd5zvtm8ll6.cloudfront.net/includes/images/document_product_info/blur-subtext-image.webp)
Ace Your Homework with AI
Get the answers you need in no time with our AI-driven, step-by-step assistance
Get Started