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Question 31 (1 point) Which one of the following bonds has the greatest interest rate risk? O A) 7-year; 7 percent coupon B)
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Answer #1

The Bond with Long duration will have the higher interest rate risk. Also the Bond will have higher interest rate risk which has lower Coupon Rate in comparison to the the Bond having the higher coupon rate.

Therefore the Correct Option is Option B as it has high duration and lower Coupon rate than the Bond in Option D.

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