Which of the following bonds has the highest level of interest rate risk? Question 36 options:...
Which of the following bonds has the highest level of interest rate risk?
Question 36 options:
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10 year 6% bond |
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Not enough information. |
|
|
30 year 6% bond |
|
|
20 year 6% bond |
Homework Answers
Bonds with the lowest coupon rate and highest years to maturity are more sensitive to changes in interest rate.
Thus the answer is:-
c) 30 year 6% bond
Add Answer to:
Which of the following bonds has the highest level of interest
rate risk?
Question 36 options:...
Which of the following statements is CORRECT? Question 14 options: 10-year, zero coupon bonds have more...
Which of the following statements is CORRECT? Question 14 options: 10-year, zero coupon bonds have more reinvestment risk than 10-year, 10% coupon bonds. A 10-year, 10% coupon bond has less reinvestment risk than a 10-year, 5% coupon bond (assuming all else equal). The total (rate of) return on a bond during a given year is the sum of the coupon interest payments received during the year and the change in the value of the bond from the beginning to the...
Problem 2 Part 1 Other things equal, which of the following bonds has the highest interest...
Problem 2 Part 1 Other things equal, which of the following bonds has the highest interest rate risk? (Hint: you do not need to do any calculation, just do pair-wise comparisons to determine which one is more sensitive to interest rate changes.) A. A 10-year, 10% coupon bond issued by the US Department of the Treasury. B. A 10-year, 20% coupon bond issued by the US Department of the Treasury. CHA 10-year, 20% coupon bond issued by Microsoft. D. A...
Which one of the following is true? Interest Rate Risk is the risk that arises for...
Which one of the following is true? Interest Rate Risk is the risk that arises for bond owners from fluctuating interest rates. All other things being equal, the higher the coupon rate, the greater the interest rate risk. Interest Rate Risk is the risk that arises for bond owners from fluctuating interest rates. All other things being equal, the shorter the time to maturity, the lower the interest rate risk. O When comparing a 20-year bond versus a 1-year bond,...
12. Price risk and reinvestment rate risk Aa Aa Which of the following statements are true?...
12. Price risk and reinvestment rate risk Aa Aa Which of the following statements are true? Check all that apply. Bonds with similar coupons will always have the same percentage price change, no matter the maturity. Rising interest rates cause the value of outstanding bonds to decrease A decline in interest rates will lead to a decline in the price of an outstanding bond To minimize interest rate risk, an investor should buy long-term bonds. Which of the following bonds...
Question 3 Unsaved Rank the following from highest to lowest by historical rate of return. Question...
Question 3 Unsaved Rank the following from highest to lowest by historical rate of return. Question 3 options: Large Stocks (S&P 500) Long-Term Bonds Small Stocks (Russell 2000) Gold Question 4 Unsaved Rank the following from Highest to Lowest by Risk as measured by the Historical Standard Deviation. Tech Stocks (NASDAQ) Treasury Bills Long Term Bonds Broad Market Index (Wilshire 5000) Question 5 Unsaved Which of the following asset classes have significantly out performed inflation as measure by the Consumer...
Which of the following bonds has the greatest interest rate price risk?
A) A 10-year, $1,000 face value, 10% coupon bond with semiannual interest payments.B) A 10-year, $1,000 face value, zero coupon bond.C) All 10-year bonds have the same price risk since they have the same maturity.D) A 10-year, $1,000 face value, 10% coupon bond with annual interest payments.E) A 10-year $100 annuity.
Question 31 (1 point) Which one of the following bonds has the greatest interest rate risk?...
Question 31 (1 point) Which one of the following bonds has the greatest interest rate risk? O A) 7-year; 7 percent coupon B) 9-year; 7 percent coupon OC) 5-year; 5 percent coupon D) 9-year; 9 percent coupon E) 5-year; 9 percent coupon
1. Which of the following bonds has the lowest interest rate risk? A. 3-year 5% corporate...
1. Which of the following bonds has the lowest interest rate risk? A. 3-year 5% corporate bond. B. 30-year 5% corporate bond. C. 30-year zero-coupon corporate bond. 2. If the effective duration of a callable bond is 5 and the negative convexity adjustment is 1%. If yield were to fall by 100 basis point, the duration combined with convexity would: A. Produce a price change of 5% B. Produce a price change of less than 5%. C. Produce a price...
k. What is interest reinvestment rate risk? Which bond has more interest rate reinvestment rate risk...
k. What is interest reinvestment rate risk? Which bond has more interest rate reinvestment rate risk (assuming a 10-year investment horizon)? g. What are the key features of a bond? h. How do you determine the value of a bond
Which one of the following bonds has the least interest rate risk? 1) 3-year, 0 percent...
Which one of the following bonds has the least interest rate risk? 1) 3-year, 0 percent coupon 2) 6-year, 0 percent coupon 3) 6-year, 6 percent coupon 4) 3-year, 6 percent coupon
Problem 2 Part 1 Other things equal, which of the following bonds has the highest interest rate risk? (Hint: you do not need to do any calculation, just do pair-wise comparisons to determine which one is more sensitive to interest rate changes.) A. A 10-year, 10% coupon bond issued by the US Department of the Treasury. B. A 10-year, 20% coupon bond issued by the US Department of the Treasury. CHA 10-year, 20% coupon bond issued by Microsoft. D. A...
Which one of the following is true? Interest Rate Risk is the risk that arises for bond owners from fluctuating interest rates. All other things being equal, the higher the coupon rate, the greater the interest rate risk. Interest Rate Risk is the risk that arises for bond owners from fluctuating interest rates. All other things being equal, the shorter the time to maturity, the lower the interest rate risk. O When comparing a 20-year bond versus a 1-year bond,...
12. Price risk and reinvestment rate risk Aa Aa Which of the following statements are true? Check all that apply. Bonds with similar coupons will always have the same percentage price change, no matter the maturity. Rising interest rates cause the value of outstanding bonds to decrease A decline in interest rates will lead to a decline in the price of an outstanding bond To minimize interest rate risk, an investor should buy long-term bonds. Which of the following bonds...
Question 31 (1 point) Which one of the following bonds has the greatest interest rate risk? O A) 7-year; 7 percent coupon B) 9-year; 7 percent coupon OC) 5-year; 5 percent coupon D) 9-year; 9 percent coupon E) 5-year; 9 percent coupon
Which one of the following bonds has the least interest rate risk? 1) 3-year, 0 percent coupon 2) 6-year, 0 percent coupon 3) 6-year, 6 percent coupon 4) 3-year, 6 percent coupon
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