Question

4. Which one of the following Bonds is Most sensitive to changes in market Interest rates? a.) 1 Year Treasury Bill c) 15 Ye
0 0
Add a comment Improve this question Transcribed image text
Answer #1

Option b, 10 Year Treasury Note

Reason: Treasury bonds have more interest rate risk than T Bills and have lesser coupon rate than corporate bonds.

Add a comment
Know the answer?
Add Answer to:
4. Which one of the following Bonds is Most sensitive to changes in market "Interest rates? a.) 1 Year Treasury Bil...
Your Answer:

Post as a guest

Your Name:

What's your source?

Earn Coins

Coins can be redeemed for fabulous gifts.

Not the answer you're looking for? Ask your own homework help question. Our experts will answer your question WITHIN MINUTES for Free.
Similar Homework Help Questions
  • 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

  • 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

  • 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

  • 1) For U.S. Treasury bonds, what type of risk exists when rates are historically low? _______...

    1) For U.S. Treasury bonds, what type of risk exists when rates are historically low? _______ A) Gap risk B) Interest-rate risk C) Default risk D) Reinvestment risk 2) Which of the following institutions assign ratings for bonds in the United States? _______ A) The Securities and Exchange Commission B) The Federal Reserve District Banks C) The U.S. Treasury D) Private companies such as Moody’s and Fitch 3) If the three-month Treasury bill yields 3.1% while the yield on a...

  • 1- Interest rates on 4-year Treasury securities are currently 6.9%, while 6-year Treasury securities yield 7.35%....

    1- Interest rates on 4-year Treasury securities are currently 6.9%, while 6-year Treasury securities yield 7.35%. If the pure expectations theory is correct, what does the market believe that 2-year securities will be yielding 4 years from now? Calculate the yield using a geometric average. Do not round intermediate calculations. Round your answer to two decimal places. 2- A Treasury bond that matures in 10 years has a yield of 5.25%. A 10-year corporate bond has a yield of 7.25%....

  • Now suppose market interest rates have risen over the course of the year. Specifically, the bonds...

    Now suppose market interest rates have risen over the course of the year. Specifically, the bonds in your portfolio experienced the following changes. Interest Rate a Year Ago (96) Interest Rate Now (96) 12 10 5.5 3. Calculate the approximate change in the price of each bond in your portfolio. (Hint) You may want to use the Equation (2) in the Web Appendix to Cho4. %A in P Portfolio Weight %) Suppose you are holding a portfolio of bonds that...

  • 6. A floating rate bond A. Typically pays interest that varies periodically with changes in some...

    6. A floating rate bond A. Typically pays interest that varies periodically with changes in some specified market interest rate like the yield to maturity on 1-year Treasury bonds B. Typically floats with the dollar against other currencies C. Will always have higher returns required by investors than fixed-rate bonds D. Always has a market price that floats with the stock market E. Typically has a put feature that enables investors to buy it at a floating price 7. A...

  • 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...

  • Impact of interest rates on bonds

    1.     Using Demand-Supply framework (Portfolio Choice Theory) explain the impact on the interest rates on Treasury Bonds, Municipal Bonds and Corporate Bonds as a result of the following events.a.     The business environment worsensb.     US Treasury cuts tax ratesc.      Housing market becomes more liquidd.     Moody’s Rating company downgrades Corporate Bonds

  • 14.Suppose that the current rate on 10-year Treasury bonds is 3.32%, on 20-year Treasury bonds is...

    14.Suppose that the current rate on 10-year Treasury bonds is 3.32%, on 20-year Treasury bonds is 4.08%, and on a 20-year corporate bond is 6.92%. Assume that the maturity risk premium on 10-year corporate bonds is 0.35% and on 20-year corporate bonds it is 0.75%. If the default risk premium and liquidity risk premium on a 10-year corporate bond is the same as that on the 20-year corporate bond, what isthe current rate on a 10-year corporate bond? A. morethan...

ADVERTISEMENT
Free Homework Help App
Download From Google Play
Scan Your Homework
to Get Instant Free Answers
Need Online Homework Help?
Ask a Question
Get Answers For Free
Most questions answered within 3 hours.
ADVERTISEMENT
ADVERTISEMENT
ADVERTISEMENT