Which one of the following bonds is the most sensitive to changes in market interest rates?...
Which one of the following bonds is the most sensitive to changes in market interest rates?
a. 5-year, zero coupon
b. 5-year, 5 percent coupon
c. 5-year, 8 percent coupon
d. 10-year, zero coupon
e. 10-year, 5 percent coupon
Homework Answers
d. 10-year, zero coupon
The longer the duration the more sensitive to interest rates. A zero coupon bond has a duration equal to its time to maturity.
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Which one of the following bonds is the most sensitive to
changes in market interest rates?...
Question 15 5 pts Which one of the following bonds is the most sensitive to changes...
Question 15 5 pts Which one of the following bonds is the most sensitive to changes in market interest rates? Zero coupon, maturing in 10 years 6 percent annual coupon, maturing in 10 years Zero coupon, maturing in 4 years 8 percent annual coupon, maturing in 4 years
4. Which one of the following Bonds is Most sensitive to changes in market "Interest rates? a.) 1 Year Treasury Bil...
4. Which one of the following Bonds is Most sensitive to changes in market "Interest rates? a.) 1 Year Treasury Bill c) 15 Year Corporate Bond b.) 10 Year Treasury Note d.) 30 Year Corporate Bond
Which one of the following bonds is the least sensitive to interest rate risk? Multiple Choice...
Which one of the following bonds is the least sensitive to interest rate risk? Multiple Choice a. 3-year; 4 percent coupon b. 3-year; 6 percent coupon c. 5-year; 6 percent coupon d. 7-year; 6 percent coupon e. 7-year; 4 percent coupon New Homes has a bond issue with a coupon rate of 5.5 percent that matures in 8.5 years. The bonds have a par value of $1,000 and a market price of $1,022. Interest is paid semiannually. What is the...
1. Which one of the following bonds is the least sensitive to interest rate risk? A. 1-year; 4 percent coupon B. 1-y...
1. Which one of the following bonds is the least sensitive to interest rate risk? A. 1-year; 4 percent coupon B. 1-year; 6 percent coupon C. 5-year; 6 percent coupon D. 7-year; 6 percent coupon E. 7-year; 4 percent coupon 2. The bonds issued by Stainless Tubs bear an 12 percent coupon, payable semiannually. The bonds mature in 15 years and have a $1,000 face value. Currently, the bonds sell for $900. What is the vield to maturity? A. 6.36...
6) Which of the following statements about bonds is true? A) If market interest rates are...
6) Which of the following statements about bonds is true? A) If market interest rates are above a bond's coupon interest rate, then the bond will sell below its par value. B) As the maturity date of a bond approaches, the market value of a bond will become more volatile. C) Bond prices move in the same direction as market interest rates. D) Long-term bonds have less interest rate risk than do short-term bonds.
If market interest rates increase, investors in corporate bonds will see the current market value of...
If market interest rates increase, investors in corporate bonds will see the current market value of their bonds do what in the secondary market? a. If the market interest rates increase, the coupon rate on the bond increases b. When market interest rates increase, the market value of corporate bonds increase c. Remain the same, because the face value never changes d. When market interest rates increase, the market value of corporate bonds decrease
** Please show work or explain If interest rates fall from 8 percent to 7 percent,...
** Please show work or explain If interest rates fall from 8 percent to 7 percent, which of the following bonds will have the largest percentage increase in its value? (If you are uncertain, do the examples yourself before answering!) a. A bond with 10 years to maturity, and a coupon rate of ZERO percent. b. A bond with 10 years to maturity, and a coupon rate of TEN percent. c. A bond with 5 years to maturity, and a...
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
Rank the interest sensitivity of the following from the most sensitive to an interest rate change...
Rank the interest sensitivity of the following from the most sensitive to an interest rate change to the least sensitive: 1.8% coupon, noncallable 20-year maturity par bond II. 9% coupon, currently callable 20-year maturity premium bond III. Zero-coupon 30-year maturity bond 1,11, O III, 1, 11 III, 11, 1
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...
Question 15 5 pts Which one of the following bonds is the most sensitive to changes in market interest rates? Zero coupon, maturing in 10 years 6 percent annual coupon, maturing in 10 years Zero coupon, maturing in 4 years 8 percent annual coupon, maturing in 4 years
4. Which one of the following Bonds is Most sensitive to changes in market "Interest rates? a.) 1 Year Treasury Bill c) 15 Year Corporate Bond b.) 10 Year Treasury Note d.) 30 Year Corporate Bond
1. Which one of the following bonds is the least sensitive to interest rate risk? A. 1-year; 4 percent coupon B. 1-year; 6 percent coupon C. 5-year; 6 percent coupon D. 7-year; 6 percent coupon E. 7-year; 4 percent coupon 2. The bonds issued by Stainless Tubs bear an 12 percent coupon, payable semiannually. The bonds mature in 15 years and have a $1,000 face value. Currently, the bonds sell for $900. What is the vield to maturity? A. 6.36...
6) Which of the following statements about bonds is true? A) If market interest rates are above a bond's coupon interest rate, then the bond will sell below its par value. B) As the maturity date of a bond approaches, the market value of a bond will become more volatile. C) Bond prices move in the same direction as market interest rates. D) Long-term bonds have less interest rate risk than do short-term 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
Rank the interest sensitivity of the following from the most sensitive to an interest rate change to the least sensitive: 1.8% coupon, noncallable 20-year maturity par bond II. 9% coupon, currently callable 20-year maturity premium bond III. Zero-coupon 30-year maturity bond 1,11, O III, 1, 11 III, 11, 1
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...
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