Which of the following is INCORRECT? A. Invoice price = dirty price B. Clean price = dirty price - accrued interest C. Accrued interest = coupon amount due x days till next coupon payment days in each coupon period D. Cash price = clean price + accrued interest 17 A 22. Which of the following statements is FALSE? Prices of bonds with lower durations are more sensitive to interest rate changes. B. When a bond is trading at a discount, the price increase between coupons will exceed the drop when a coupon is paid, so the bond's price will rise and its discount will decline as time passes. Coupon bonds may trade at a discount, at a premium, or at par. D. The sensitivity of a bond's price to changes in interest rates is the bond's duration C Ole Olan Uw them Consider the following for bonds that pay anal compone Year to Hond Coupe maturity YTM A 10 5 5 . 7" C 10 10 D 20 30. IVhich of the four bonds is the most sensitive to an increase of 1 in the YIM? First, compute the percentage change in price for each bond Years to Bond maturity Coupon YTM Price Price1 "Chus Chg 1 0% 5% 952.38 1943.40 -0.94% (ES 98 B 5 6% 959.00 920.15 -4.05% (38.85) 10 10% 9% 1064.18 1000.00 -6.03% (64.18) D 20 0% 8% 214.55 178.43 -16.83% 836.12) Based on the percentage change in price, a 1% increase in the YTM of Bond D, will decrease the price of the bond by almost 17%, making bond the most sensitive 31. Which of the four bonds is the least sensitive to a one percent increase in the YTM