Which of the following bonds have the largest price risk and why? Note that the bonds are

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Which of the following bonds have the largest price risk and why? Note that the bonds are identical in all respects except for the size of the coupon.

a. Zero-coupon bond

b. Par bond

c. Discount bond

d. Premium bond

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Financial Institutions, Markets and Money

ISBN: 978-1119330363

12th edition

Authors: David S. Kidwell, David W. Blackwell, David A. Whidbee, Richard W. Sias

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Question Posted: Sep 29, 2018 01:36 PM

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Which of the following bonds have the largest price risk and why? Note that the bonds are

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The lower the coupon the higher the bonds duration and price risk ...View the full answer

Financial Institutions, Markets and Money

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