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You are worried that interest rates may rise. Which investment is likely riskier: a 8 year 8.6% coupon bond, or a 8 year zero coupon
You are worried that interest rates may rise. Which investment is likely riskier: a 8 year 8.6% coupon bond, or a 8 year zero coupon bond? (Assume both investments have the same market value.) (a) It is impossible to determine which is riskier without knowing the current interest rate. (b) They likely have the same risk level. (c) The 8 year 8.6% coupon bond. (d) The 8 year zero coupon bond
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