Which of the following is true?

Select one: Given time to maturity and yield to maturity, the duration of a bond is higher when the coupon rate is higher. Given time to maturity, the duration of a zero-coupon increases with yield to maturity Duration is a better measure of price sensitivity to interest rate changes than is time to maturity Holding other things constant, the duration of a bond decreases with time to maturity Given time to maturity and yield to maturity, the duration of a bond is higher when the coupon rate is lower. Duration is a better measure of price sensitivity to interest rate changes than is time to maturity.

Q15 One year ago, you purchased an annual coupon bond with a coupon rate of 6%, a par value of $1,000 and a maturity of 8 years. At the time of purchase, the yield to maturity was 5%. You received your first annual coupon today and the bond is selling at a yield to maturity of 7%. If you sell this bond today, your annual holding period return will be (approximately)

Select one:

-6.18%.

-5.50%.

8.95%.

4.18%.

-6.86%.