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You have the following bonds to choose from: i) 4% coupon, 15 year maturity ii) 4% coupon, 10 year maturity iii) zero coupon, 15 year
You have the following bonds to choose from:
i) 4% coupon, 15 year maturity
ii) 4% coupon, 10 year maturity
iii) zero coupon, 15 year maturity
iv) 2% coupon, 15 year maturity
Assume your primary goal is to minimize price sensitivity.
Which of the following bond rankings best meets this goal (i.e. order the bonds from least price sensitive to most price sensitive)?
A) iii), i), iv), ii).
B) ii), iii), iv), i).
C) ii), i), iv), iii).
D) iii), iv), i), ii).
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